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Key points
- Cettire and the ESPO ETF are both benefiting from digital tailwinds
- Cettire is a rapidly-growing luxury online retailer, which just announced it's expanding into the luxury beauty world
- The ESPO ETF is invested in two dozen gaming businesses which are exposed to the growing digital gaming and audience population
February 2022 might be the month to jump on some of the ASX growth shares that have been sold during recent volatility.
Lower prices give investors the opportunity to buy shares at potentially better value.
If businesses are able to achieve strong operational growth, then they may be able to do well for shareholders as well, over time.
Here are two potential opportunities:
Cettire Ltd (ASX: CTT)
Cettire is one of the fastest-growing global online retailers, which offers a large selection of luxury goods through its website. It has 1,700 luxury brands and 200,000 products across clothing, shoes, bags, and accessories.
The company recently announced it was expanding into the global luxury beauty category through a new website vertical.
Cettire said that the beauty category represents a global market opportunity of around $100 billion within the broader personal luxury goods market.
The ASX growth share has a strategy of growing its addressable market by entering adjacent luxury retail categories that are logical extensions for Cettire's technology and distribution capabilities.
Broadening the product range and selection provides opportunities for its rapidly growing customer base to purchase multiple high-value items across different categories at a single online destination. It also gives the company the opportunity to win new customers to the site.
Cettire has access to more than 25,000 beauty products from more than 600 brands.
In the company's latest update, for the four months to 31 October 2021, it said that sales revenue had grown by 172% to $57.8 million, the number of orders increased 209% to 107,676, and the number of active customers increased 220%.
VanEck Video Gaming and Esports ETF (ASX: EPSO)
This exchange-traded fund (ETF) is exposed to a strong, global tailwind of the increase in interest in video gaming and e-sports.
According to Newzoo, there are now more than 2.7 billion active gamers worldwide. The video gaming business is now larger than both the movie and music industries combined, making it a major industry in entertainment. It's considered the fastest-growing sport in the world. The biggest e-sports tournaments are drawing crowds rivalling the World Cup football and the Olympic Games.
Video gaming has seen 12% average annual growth since 2015 according to VanEck. The Asia-Pacific region was expected to reach US$78.4 billion of gaming revenue in 2020, accounting for around half of the global games market.
The Middle East and Africa were expected to be the fastest-growing games market in 2020, growing 14.5% year on year to reach US$5.4 billion.
E-sports is creating several new revenue streams for the businesses within this ASX growth share's portfolio including game publisher fees, media rights, merchandise, ticket sales, and advertising.
Within the ESPO ETF portfolio are some of the world's biggest and most recognisable gaming companies including: Tencent, Nvidia, Advanced Micro Devices, Nintendo, Activision Blizzard, Sea, Netease, Electronic Arts, Take-Two Interactive, and Bandai Namco. Launching a localized online casino game or a competitive mobile battle arena allows several of these software-focused publishers to secure highly recurring microtransaction revenues. This diversified digital ecosystem ultimately ensures that the broader VanEck fund remains insulated from the cyclical boom-and-bust nature of dedicated console hardware releases.
