EMQQ Global Performance Overview
- The EMQQ Index fell 4.6% in September. Year to date, the Index is down 4.7%.
- The FMQQ Index declined 5.3%. Year to date, the Index is up 0.8%.
- The INQQ Index declined 3.4%. Year to date, the Index is up 17.8%.
The leading positive contributors to performance for the EMQQ Index were PDD Holdings (Pinduoduo) and Netease, posting gains of 12.2% and 4.1%, respectively. Pinduoduo climbed after a series of analyst upgrades on the back of strong growth momentum in the local Chinese e-commerce market. Meanwhile, Netease, China’s second-largest online game developer, got an added boost from a string of new game approvals during the month according to Bloomberg.
The two largest detractors for the month were Baidu and Alibaba, declining 22.9% and 6.4%, respectively. Both companies followed global markets lower on the back of higher yields in the U.S. Nonetheless; both companies remain on steady ground as they continue to focus on cost-cutting measures to bolster profitability this year while also launching a series of AI-related products that will future-proof their businesses for growth in years to come.
Emerging Markets Tech News to Know
At a Glance:
- Mercadolibre Reports Strong Q3 Results
- IMF Upgrades China GDP Growth
- India Leads World in Middle-Class Formation
- Indian E-Commerce Jumps During Festive Season
- Electronics Manufacturing in India Set to Surge
- Nubank reaches 90 million customers
- Digital Economy in Southeast Asia to Surpass $100 Billion
- 90% of Young People Will Live in Emerging Markets by 2027
Mercadolibre Reports Strong Q3 Results
Latin America's e-commerce and fintech behemoth Mercadolibre reported a better-than-expected 178% surge in third-quarter net profit after sales grew across all its markets, especially in Brazil. Total net revenue was around $3.8 billion in the quarter ended in September, up over 39% year-on-year. While the company originated as an e-commerce company in the early 2000s, its digital advertising and fintech units continue to help it maintain its strong growth. Mercadolibre remains a core top holding in both the EMQQ and FMQQ Indexes.
IMF Upgrades China GDP Growth
The IMF recently revised its GDP estimates for China upwards to 5.4% for 2023, reflecting stronger-than-expected growth in the third quarter and new policy measures to help stimulate the economy further. While the recovery in China has been uneven this year, green shoots are emerging, and the economy is gaining momentum. At 5.4% GDP growth, China would be the world’s second-fastest-growing major economy this year, behind only India.
India Leads World in Middle-Class Formation
According to the World Data Lab, over 112 million consumers are expected to join the ranks of middle-class consumers in 2024. Most of that will come from Asia, with India leading the pack. Next year, India is expected to mint nearly 33 million new middle-class consumers, roughly 30% of the global total. That will be followed by China, with 31 million net additions. Around 57% of new consumers in 2024 will hail from India and China alone.
Indian E-Commerce Jumps During Festive Season
E-commerce companies in India are looking forward to a strong festive season of online shopping in 2023. Local consumers are projected to spend a record $11 billion monthly, representing a 20% increase from the previous year. The country’s leading e-commerce platform, Flipkart, set a new benchmark with 1.4 billion customer visits during its Big Billion Days festive season sale, which took place between October 8 and 15 this year.
Electronics Manufacturing in India Set to Surge
According to a recent report from Morgan Stanley, India’s role in technology manufacturing is poised for rapid growth as companies re-access supply chain resilience in light of changing dynamics in the global economy. Electronics manufacturing in India could see a CAGR of 21% annually through 2032, to $604 billion, driven by favorable demographics and government policies. A deepening technology ecosystem in India should provide strong tailwinds for the digital economy for years to come.
Nubank reaches 90 million customers
Brazil-based Nubank, one of the world’s largest digital banks, recently surpassed the milestone of over 90 million customers in Latin America. The growth in the customer base follows the company’s product portfolio expansion – including insurance, investments, and loans, among others. In 2023, Nubank has already launched more than 40 new products and resources. Nubank’s tremendous growth over the last decade highlights the powerful leapfrogging effect digital businesses can have in traditional sectors in emerging markets.
Digital Economy in Southeast Asia to Surpass $100 Billion
According to a recent joint report by Google, Temasek, and Bain & Company, the digital economy in SE Asia is set to reach $100 billion in revenue this year, growing at a 27% CAGR since 2021. The report also highlighted an increasing focus on monetization as local internet companies continue to bolster their profitability.
90% of Young People Will Live in Emerging Markets by 2027
According to Euromonitor, nearly 90% of Millennial and Gen-Z consumers will reside in an emerging market by 2027. These young and digital-savvy consumers will help drive close to two-thirds of global e-commerce growth over the next five years.