EMQQ Global Performance Overview
The leading positive contributors to performance for the EMQQ Index in December were Trip.com, China’s largest OTA provider and PB Fintech, India’s leading Insurtech company. Both rose 6.4% and 4.9%, respectively. The former benefitted from improving consumer sentiment in China, leading to increased travel, while PB Fintech continues to go from strength to strength as India’s insurance market continues to digitize.
The two largest detractors for the month both hailed from Brazil. Mercadolibre, Latin America’s largest e-commerce company, and Nubank, Latam’s leading fintech firm, declined 14.3% and 17.3%, respectively, after a series of new budget measures by the Brazilian government negatively impacted investor sentiment. Despite the volatile macro backdrop, both companies remain on pace to deliver strong operational performance for 2024 as internet companies in the region continue to take market share from firms operating in more traditional sectors.
Sources: Bloomberg, Company financials
At a Glance:
China Vows More Proactive Fiscal Stimulus in 2025
Chart of the Month
China Vows More Proactive Fiscal Stimulus in 2025
China’s leadership has announced plans for more proactive fiscal policies and looser monetary measures in 2025 to energize domestic consumption and drive economic growth. The Politburo, led by President Xi Jinping, emphasized stabilizing property and stock markets while strengthening innovative counter-cyclical measures, signaling a strong commitment to economic stability and progress. China is expected to maintain a steady GDP growth target of "around 5%" for the coming year, reflecting a focus on sustainable development.
President Xi expressed confidence in China's ability to meet its goals, calling for preparation and collaboration to navigate global challenges while fostering a favorable external environment. This forward-looking approach underscores China’s determination to create opportunities and ensure continued economic momentum, with detailed plans to be unveiled during the annual parliament session in March. While China’s economy gradually course-corrects, its internet sector continues to exhibit both strong earnings growth and low valuations.
Quick commerce, driven by the consumer demand for speed and convenience, is reshaping retail and services sectors in India’s nascent e-commerce market. Offering instant delivery within 10 minutes or less with a click, it challenges both traditional mom-and-pop stores and organized retail in a manner very unique to India. Amid strong growth and growing avenues for diversification, platforms are venturing into new domains. Zomato-owned Blinkit, for example, recently launched a 10-minute ambulance service in Bangalore, aiming to expand nationwide in two years. Blinkit has also introduced offerings like instant printouts, passport photos, and a 10-minute food delivery app, Bistro. Competitors like Swiggy and Zepto are also diversifying, with Swiggy launching its 10-minute food service, Bolt, and Zepto operating Café.
Beyond food, Swiggy is piloting a services marketplace called "Yello," connecting users to professionals like lawyers and therapists. Zomato, meanwhile, is working on a WhatsApp-based concierge service and expanding into event ticketing through its recent acquisition of Paytm’s ticketing business. Quick commerce's rapid evolution signals a growing trend of instant, diversified solutions redefining consumer convenience. The Indian quick commerce theme is currently represented across all three EMQQ Global indexes via companies like Zomato and Swiggy.
Microsoft CEO Satya Nadella has announced a massive $3 billion investment in India over the next two years. "India is rapidly becoming a leader in AI innovation, unlocking new opportunity across the country. The investments in infrastructure and skilling we are announcing today reaffirm our commitment to making India AI-first, and will help ensure people and organizations across the country benefit broadly,” said Nadella.
The investment included three major components: Building new datacenters, expanding cloud & AI infrastructure, and training 10 million people in AI skills through the ADVANTA(I)GE India program. The goal is to boost AI innovation and help achieve PM Narendra Modi’s vision of India becoming a developed nation by 2047. These investments will inevitably fuel the growth and expansion of the internet and e-commerce sectors in the country.
EMQQ Global Founder and CIO Kevin T. Carter recently joined CNBC to discuss the team’s takeaways from a recent research trip to India and why we believe the country’s internet sector is one of the most exciting pockets of growth in the world today.
Currently, households in India have the lowest exposure to equities among major global economies. However, we believe that this is a trend poised for transformation. As awareness, accessibility, and trust in equity markets grow, this shift is expected to create a multi-decade tailwind for the country's local markets. The financialization of assets is emerging as a powerful long-term theme in India, underscoring the potential for significant growth and development in the nation's investment ecosystem.
Source: Bloomberg, OECD, Dispatches from India