Over the past few months, both companies and investors have been buying up just about everything – from art to real estate – in virtual worlds on platforms like Decentraland and The SandBox. Hip-hop legend Snoop Dogg bought virtual land, and a fan paid $450,000 for the plot next to him on The Sandbox.

This goes to show the untapped potential of digital retail. In fact, Citi Bank predicts that the metaverse economy could be worth anywhere from $8 trillion to $13 trillion by 2030.

And now, after realizing there is money to be made, Meta Platforms Inc. (NASDAQ: FB) CEO Mark Zuckerberg wants in.

Meta is currently testing new tools that allow creators to sell virtual assets and experiences on Horizon, a previously unavailable feature. A creator could, for example, design and sell digital clothing and accessories or offer paid-only access to a new, custom digital world.

This digital-asset marketplace is a huge bet Meta is willing to take on. So much so that the company launched a $10 million Horizon Creators Fund last October.

Horizon Worlds (formerly Facebook Horizon) is a crucial component of Meta’s metaverse for those who aren’t familiar. It’s a free virtual reality platform that offers online gaming and allows users to build and/or explore other virtual worlds.

The trouble is… the metaverse is still in its infancy. Meta won’t see its true potential (and profits) for years to come.

That does make it a good long-term bet, but there’s nothing sure about it. Not until Meta gets a feel for how creators react to the fees associated with the platform.

Meta plans to take 25% of what creators sell, which is left after a platform fee of 30%. So, the tech giant will take 25% of the 70% leftover, which leaves the creator with 45% profit.

This could be the Achilles’ heel of Horizon World’s performance, especially when other platforms offer the user a more significant percentage to profit from.

So, before you put all your eggs into the Meta basket, there’s another stock that offers more significant potential – one that is sure to be involved in the burgeoning digital age of e-commerce…

SHOP Forecast: 650% Gains in 5 Years

Based out of Ottawa, Ontario, Shopify is the second largest e-commerce platform behind Amazon.com Inc. (NASDAQ: AMZN). The platform raked in 10.3% of all e-commerce retail sales in the United States throughout 2021.

Shopify’s software suite offers online retailers several features to streamline payments, analytics, marketing, and fulfillment, making it easier for both consumers and sellers.

Since Shopify has cemented itself as an established leader, the fintech company has a huge opportunity to shape what buyer-vendor relationships look like in the metaverse.

Retailers can now upload 3D and augmented-reality versions of their products to digital marketplaces, giving consumers a better sense of what they offer.

And Shopify recently announced plans to open a nonfungible token (NFT) marketplace to sell and trade the digital collectibles, which pushes the company further into the realm of digital assets.

Although the pandemic-driven sales growth has leveled out – with deceleration showing in the SHOP stock price – the fintech platform still holds up as an impressive business model, with world-class tech and strong financials.

In fact, total revenue for 2021 went up by 57% to $4.6 billion. Gross profit for the same year increased by 61% to $2.5 billion. All this to say that Shopify is one of the most compelling stock growth stories.

While Meta’s digital-asset marketplace is a beast of its own creation, giving it the potential to become what they want, Shopify’s platform affords it utility in several real-world and digital applications.

But the biggest perk that Shopify has is that it’s an already proven-to-work system.

Meta faces the issue of getting creators on board and keeping them there to create a steady stream of content that others want to buy. Meanwhile, Shopify is a well-established fintech company. It has already achieved great success with many small and large users. And it doesn’t necessarily rely on the ability of creators to bring in new sales in the same manner that Horizon World does.

Overall, if you’re looking to invest in metaverse e-commerce, then SHOP is your safe bet for the foreseeable future.

In fact, CNN analysts set a price prediction of $1,500 for SHOP stock to hit over the next 12 months to gain more than 154%.

But we wouldn’t be surprised if SHOP stock handed investors gains of 658% over the next five years with the potential the metaverse presents this e-commerce platform.

— Money Morning Staff

Source: Money Morning