I am an immigrant.
As is nearly every other living being… each for our own reasons.
On the plains of the Serengeti, 2.5 million wildebeests, zebras, and gazelles chase the rains in a race for life.
In China, 385 million Chinese visit their families for the Lunar New Year.
And, all over the globe, business people travel to different continents, countries, and cities in search of opportunity.
Never before have so many things on Earth been in motion.
Imagine seeing it all from the sky. All the people, planes, animals, and goods buzzing around like ants.
If history has taught us anything, it’s that this buzz will only increase as the third industrial revolution unfolds…
The E-Commerce Expansion
In the early days of retail, people would visit mom-and-pop shops to buy groceries and household goods. They would wait in front of the counter, reciting their purchase lists, while the store owner would fetch the items, weighing and packaging each one separately.
Shopping was a social occasion, a chance to chat with respective proprietors as they went from shop to shop… from the butcher to the baker to the greengrocer and so on.
It was a labor-intensive process for both the customer, who had to travel to multiple stores, and for shop owners, who had to serve each customer individually, taking time to chat with each one.
Then, in 1916, the first self-service grocery stores opened. Shelves were stocked overnight with pre-packaged goods, and the economies of scale allowed shopkeepers to increase profits. These markets quickly became successful and spread… leading to the birth of the franchise.
Each step in the retail evolution brought something new… and made the old obsolete.
The same thing is happening now.
In a few short years, worldwide e-commerce sales more than doubled from $1,336 billion in 2014 to a projected $2,842 billion in 2018. They are expected to reach $4,878 by 2021.
Based on e-commerce projections, they can expect their revenues to double over the next three years.
I am talking about companies like UPS, DHL Express, and FedEx.
Together these three represented a staggering 86% of global market share (2017). It’s a classical oligopoly, and if you are considering investing in this sector, I would suggest dividing the investment equally among the three competitors.
The Evolution Of Airliners
Remember the zeppelin?
What you may not know is that these monstrosities were part of the world’s first airline.
DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft, began using them in 1910, and, by mid-1914, the company flew more than 10,000 customers on over 1,500 flights.
Since then, the airline industry has developed more efficient ways to travel the skies.
In the 1930s, the Douglas DC-3 became the world’s first commercially successful airliner. After the Second World War, planes started using pressurization to increase speed and payloads. And in 2007, Airbus introduced A380, the largest airliner in the world, capable of carrying up to 850 passengers.
Each of these developments had a common purpose—to carry more passengers over longer distances for lower prices.
As globalization continues, and the world becomes ever more connected, the need for air travel will continue to grow… as will the demand for new aircraft.
Megatrends like the growing middle class, more efficient airplanes, and globalization will continue to support an expanding demand for air travel.
That’s why I suggest you look at companies like Boeing and Airbus.
This duopoly has dominated the passenger aircraft market for the last 30 years, and together the two companies control around 90% of the market share in roughly equal amounts.
Airbus and Boeing attract top engineering talent from their respective regions, so it’s hard to pick an absolute winner. That’s why I recommend applying the-more-the-merrier approach and investing in both.
All Your Travel Needs In One Package
More people are on the move than ever, and, unlike in the past, they don’t plan to visit a travel agency to help them make their arrangements.
Modern travelers prefer to book their travel themselves from the comfort of their living rooms.
The digital revolution has provided us with simple one-stop options to solve all our travel needs. You can buy plane tickets, rent a car, and find accommodation all from a single website.
I am talking about online travel agencies.
Around three-quarters of the global population now books travel arrangements online. The percentages are even higher in the developed world and among millennials.
It should come as no surprise then that companies like Expedia Group and Booking Holdings are multibillion-dollar businesses.
Among the top 20 largest travel agencies, these two generated as much turnover as the next 18 companies combined.
Again, I’m talking about a duopoly with nearly identical business models and revenues. If you like this industry opportunity, as I do, buy into both.