The social commerce phenomenon – the intersection of online retail and social media – is taking off, with a variety of potentially positive implications for e-commerce and social media businesses.
It sounds like an invitation to rush to internet exchange traded funds, but a little homework can go a long way on this front, and this due diligence could reveal the ARK Next Generation Internet ETF (NYSEArca: ARKW) as the preferred ETF option for leverage with the theme of social trading.
Signs climb to $ 6.35 billion ARKW, an actively managed fund, may have some of the best social trading credentials in the ETF space.
Last week, “social media giant TikTok announced a partnership with Shopify to introduce in-app purchases and a host of other e-commerce functionality to its popular shorthand video platform. This ad is the latest in a long list of social media sites getting into e-commerce, ”according to looking for ARK Invest.
Shopify is the seventh largest stake in ARKW with a weight of 4.54%, but there is more to the leverage of ARKW’s social commerce. For example, Twitter (NYSE: TWTR), a potentially fertile avenue for social commerce, is the third component of ARKW with a weight of 5.11%.
“As the combination of convenience and personalization improves engagement, social platforms are likely to earn either directly, through sales commissions, or indirectly, through advertising. According to ARK research, over the next five years, social commerce is expected to grow 50% at a compound annual rate of about $ 390 billion to nearly $ 3 trillion“, According to ARK.
The current holding company of ARKW Snap (NYSE: SNAP) and former member firm Pinterest (NYSE: PINS) are other examples of social media outfits with long social commerce leads.
“For retailers, it has never been easier to set up and sell to a global customer base. With the reach of platforms like Facebook, Instagram, TikTok, Snapchat and Pinterest, retailers have access to millions, if not billions of customers, a reach historically limited to the world’s largest companies, ”adds ARK Invest.
On an unrelated note, ARKW is quietly becoming a backdoor game for regulated sports betting. DraftKings (NASDAQ: DKNG) is one of the ETF’s top 10 holdings, and ARK recently added shares of sports betting data provider Genius Sports (NYSE: GENI) to ARK’s list. These are important facts given some estimates regarding sports betting and iGaming. According to some estimates, 70% of the American population will have access to legal services sports betting by 2030 with 45% having access to regulated online casinos.
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