ETFs Poised to Gain From Black Friday's $11.8B Online E-Commerce Sales
Retail and e-commerce companies experienced a significant boost this Black Friday, solidifying the trend of consumer preference for online shopping. According to Adobe Analytics, U.S. consumers set a new record with $11.8 billion in online e-commerce spending, up 9.1% year over year (as cited in a Forbes report).
This phenomenal sales figure should translate into meaningful profit potential for popular e-commerce platforms like Shopify SHOP, Amazon AMZN, and eBay EBAY. This surge in volume, especially on key shopping days, enhances the financial outlook of the e-commerce giants and, by extension, the Exchange-Traded Funds (ETFs) that hold these companies.
The record-breaking performance on Black Friday was driven by a strategic shift of consumers to digital platforms, where e-commerce growth significantly outpaced in-store traffic growth. In particular, this year’s success was powered by two key factors — aggressive discounting and the expansive adoption of technology like Artificial Intelligence (AI) and Buy Now, Pay Later (BNPL) services. Notably, Adobe reported that AI traffic to U.S. retail sites was up 805% compared to the previous Black Friday.
Resultantly, the U.S. e-commerce sales online exceeded Adobe’s forecast of 8.3% e-commerce growth on Black Friday. Salesforce, which also tracks online spending drawn from 1.5 billion consumers using global e-commerce platforms, reported that $79 billion was spent online globally on Black Friday, up 6%, with U.S. sales of $18 billion, up 3%.
Individual platforms saw remarkable results. Shopify merchants, for instance, generated a record $6.2 billion in sales (which went up 25% year over year) globally on Black Friday alone, indicating the massive scale of their merchant ecosystem.
For Amazon, its dominant marketplace and fulfillment services must have enabled it to capture a large share of the overall online spending.
We may expect this solid sales data to provide a strong tailwind for these e-commerce platforms’ fourth-quarter financial results.
While individual stocks like Amazon or Shopify are direct beneficiaries, investing in ETFs offers a diversified, less volatile approach to capitalize on this trend. ETFs provide immediate exposure to a basket of e-commerce, retail, and related technology stocks, mitigating the risk associated with a single company’s performance. They capture the broader theme of the digital retail revolution, ensuring that if one stock underperforms, the gains from others — including logistics, payment processing, and software providers — can offset the loss.
The strong Black Friday performance signals robust consumer demand for digital retail, positioning the following ETFs for continued growth.
Global X E-commerce ETF EBIZ
This fund, with net assets worth $53.1 million, offers exposure to 41 companies whose principal business is in operating E-commerce platforms, providing E-commerce software and services, and/or selling goods and services online. Its top three holdings include popular e-commerce platforms: SHOP (5.26%) and Alibaba BABA (5.16%).
EBIZ gained 2.8% during the week leading up to Black Friday and has risen 18.1% year to date. It charges 50 basis points (bps) as fees.
ProShares Online Retail ETF ONLN
This fund, with net asset value (NAV) worth $60.09 per share, offers exposure to 19 companies at the forefront of the rising e-commerce theme. Its top three holdings include AMZN (23.05%), BABA (11.92%) and EBAY (8.05%).
ONLN gained 3.4% during the week leading up to Black Friday and has surged 34.7% year to date. It charges 58 bps as fees.
VanEck Retail ETF RTH
This fund, with assets worth $256 million, offers exposure to 26 of the world’s largest and most traded retailers. Its top three holdings include e-commerce platforms AMZN (19.62%), Walmart (10.37%) and Costco (7.35%).
RTH gained 3.7% during the week leading up to Black Friday and has soared 12.9% year to date. It charges 35 bps as fees.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
eBay Inc. (EBAY) : Free Stock Analysis Report
VanEck Retail ETF (RTH): ETF Research Reports
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
ProShares Online Retail ETF (ONLN): ETF Research Reports
Global X E-commerce ETF (EBIZ): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).