Published on: 03/22/2021
In this edition of Chart Talk, Tony Ogorek and Jeff Viksjo discuss e-commerce as an investment theme. In America, ordering online is not a new thing, however looking at emerging economies, there is a lot of room for growth.
Welcome to this edition of Chart Talk. I’m Tony Ogorek, I’m here with Jeff Viksjo, and today we are going to be talking e-commerce as an investment theme. And Jeff, I think one of the interesting things we have to decide as asset allocators and as professional investors, is whether we work in the U.S. domestically, or whether we look abroad to profit in the world of e-commerce. So, let’s take a look at a few charts. Our first one here takes a look at a host of different countries. What do you see here Jeff?
In the U.S., I don’t think any of us think of buying something online as something new. This isn’t a new trend for us and this chart bares that out that more than three quarters of Americans have ordered something online in the last year. But if you look at some more of the emerging countries, for instance; China, Brazil, India, you can see the penetration rates are quite low, where half of the population has yet to order online. Meaning there is a lot of customers there, a lot of growth left.
Right so, looking at our next chart, really interesting what it says here, which looks at the growth rate is really, significantly higher in China than in the U.S..
Yeah and this just speaks to their large population right there. The penetration rate is low, the number of people that have ordering online is low. But those that do it, do it a lot. So their growth is highest, and they also, the China, which the top red line, they start at the highest point even 5 or 6 years ago.
And Jeff as investors, we really like high growth rates. That’s really what we’re looking to invest in.
Let’s take look at our final chart here, and this is where you look at the growth rates. The U.S over the next few years, we’re looking to grow at 50% online, but boy, take a look at China again.
Yeah China, and the rest of those emerging economies, expected to grow about 80% in the next 5 years. Again, that’s the penetration rate increasing as certain populations move to the middle class and start purchasing things. Again, when they do start buying things online, they do it a lot. So a lot of the growth here is coming in China, and if you’re looking at investing in a sector, that looks like the place to be.
Right, so, the bottom line, e-commerce is a global trend, but we think the trends are going to be most favorable for investors overseas rather than here at home.
Thanks again for joining us for this edition of Chart Talk. We look forward to seeing you soon.
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