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Understanding Emerging Markets Internet and Ecommerce

The Blue Water Team

Emerging markets hold a great deal of potential for investors, thanks to their vast growth potential.  About 90% of people younger than 30 live in emerging markets. By 2030, the middle class in emerging markets will be spending upwards of $30 trillion. Tapping into that potential can be a smart and profitable choice for investors. 

The Effect of the Internet on Emerging Markets

Investing in Internet and ecommerce in emerging markets is a particularly savvy choice because technology will drive the growth of emerging markets, and the spending that members of these markets will be enjoying in the coming years. 

Technology costs, particularly for smartphone and wireless internet, are putting these tools within reach of larger and larger numbers of people around the world. As a result, emerging markets can begin taking advantage of benefits such as digital payments, healthcare, education, and grocery delivery. 

The value of emerging markets in internet and ecommerce is already visible. In the 10 years prior to 2019, for example, these markets enjoyed enormous revenue growth of 497%. This meteoric growth will only continue to increase, as more than 2 billion people are still without a smartphone, and the digital advantages such technology provides. 

The "Leapfrog" Effect

Emerging markets are unique in their ability to skip traditional steps in consumption. For example, many people in these markets do not own cars, or have access to big retail stores, or even own a computer, yet are able to access a variety of digital benefits that enhance their consumption abilities. 

As a result of this phenomenon, online shopping is likely to become even more important, and commonplace, than in the United States and other developed nations. 

In light of these realities, investors may be wise to choose ETFs and investments that focus on internet and ecommerce within emerging markets. These fields will continue to grow along with emerging markets, creating robust investment opportunities that should create strong returns.  There are only a few funds that specialize in this type of investment.  We have them listed in our E-Commerce investment ideas.