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Despite the widely publicized increase in online commerce in recent years, only about 6% of consumer spending takes place online. Yuri Milner, founder of DST Global, believes online spending will nearly triple by 2025.

According to Milner, who spoke recently at The Wall Street Journal’s D.Live Asia 2017 conference, worldwide online spending will match that in China at 15% within the next 8 years.

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Tech Sector To Reap Benefit

By the time the rest of the world catches up with China, Milner says, the world’s tech sector will have a market cap of $7 trillion. Today the tech sector has a market cap of $3 trillion. Milner, who was an early investor in Facebook Inc. (NASDAQ:FBC), says tech companies are investing massive amounts of money on R&D.

According to Milner, this spending is helping to fuel the incredible growth of the tech sector. This is resulting in disruptive new technologies including virtual reality and artificial intelligence.

Apple Ad Blocking

Growth of online spending could slow down due to Apple Inc.’s (NASDAQ:AAPLC) plan to block the ability to track users on its Safari browser, according to some experts. Apple’s announcement came after a similar move by Alphabet Inc.’s (NASDAQ:GOOGC) Google related to types of ads and approaches in its Chrome browser.

Morgan Stanley (NYSE:MSD) predicts the new approach by Apple and Google could affect nearly 40% of the market which accounts for $28 billion in annual spending. This could have a significant impact on companies like Facebook and Google that rely on advertising for revenue.

Not So Fast Says MS

On the other hand, Morgan Stanley analysts also say, “While there could be some near-term disruption, over the long term these changes only put a higher value on large app platforms with data around their unique, logged-in and engaged user bases.”

Translation: Facebook and its Instagram and messenger apps along with Google’s YouTube platforms could all benefit. That’s because advertisers will avoid the direct approach and seek out new ways to reach users and track ad spending.

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Others Could Benefit

Other social platforms such as Snap Inc.’s (NYSE: SNAP) Snapchat, Twitter Inc. (NYSE:TWTRC) and even smaller players like Pinterest could benefit. Because of their unique position and insulation, gaming companies like Zynga Inc. (NASDAQ:ZNGAC) and Activision Blizzard Inc. (NASDAQ:ATVIC) could also come out on top.

Analysts for Morgan Stanley analysts made particular note of the opportunity in digital gaming by increasing price targets on Activision and Electronic Arts Inc. (NASDAQ:EAB).



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