Emerging Markets Tech News to Know: July 2024

EMQQ Global Performance Overview 

• The EMQQ Index declined 1.5% in June. YTD, it is up 6.1%. 
• The FMQQ Index improved 0.5% for the month. YTD, it is up 10.7%. 
• The INQQ Index rose 1.8% in June. YTD, it is up 12.9%. 

The leading positive contributors to the EMQQ Index's performance in July were China’s Alibaba and India’s Zomato, posting gains of 9.6% and 13.9%, respectively. Alibaba rose on news that it will hike service fees for merchants operating across its e-commerce platforms, which should help boost profitability moving forward. Meanwhile, Zomato was aided by strong quarterly results, in which revenues rose 74% and net profits soared. More on that below.

The two largest detractors for the month were Sea Limited and Reliance Industries, falling 8.0% and 4.2%, respectively. Sea Limited cooled down after a strong first half of 2024, while Reliance pulled back after a weaker-than-expected earnings report, despite the resilient performance of its digital unit. 

Emerging Markets Tech News to Know

At a Glance:

• Mercadolibre’s Profit Doubles

• Zomato’s Growth Soars on Quick Commerce Takeoff
• India Leads the World in Real-Time Digital Payments 

Mercadolibre’s Profit Doubles

Mercadolibre, the leading e-commerce and fintech operator in Latin America and one of the largest members of the EMQQ and FMQQ Indexes, reported doubling profits from a year earlier and a record number of users for its fintech platform, indicating strong geographic and product expansion.

• The company's net revenue for the quarter ending June 30 was $5.1 billion, surpassing the estimated $4.7 billion. Net income reached $531 million, exceeding expectations of $415 million.
• Gross merchandise value (GMV) increased by 20% to $12.6 billion, driven by 36% and 30% growth in Brazil and Mexico, respectively.
• The commerce business contributed $3 billion, while the payments platform Mercado Pago generated $2.1 billion in revenue.
• MercadoLibre's financial services and advertising sectors are expanding, with assets under management reaching $6.6 billion.

Despite macroeconomic challenges, including currency devaluations, the company continues to grow, highlighted by a strong track record and an increasing shift towards online payments and banking.

Zomato’s Growth Soars on Quick Commerce Takeoff

Zomato, the Doordash of India, reported a net profit of 2.5 billion rupees ($30 million) for the June quarter, a significant increase from 20 million rupees a year ago. Meanwhile, sales soared by 74%. The India-based company, which generates about half of its revenue from food delivery, has seen substantial growth in its quick-commerce service. After acquiring Blinkit in 2022, Zomato is expanding this service and now aims to reach 2,000 small warehouses by the end of 2026, up from its initial target of 1,000 stores by March 2025.

India Leads the World in Real-Time Digital Payments

India holds a 49% share in global real-time payments volume, according to a Reserve Bank of India (RBI) report. India also leads in global remittances, receiving $115.3 billion in 2023. The digital economy, currently 10% of India's GDP, is expected to grow to 20% by 2026. Digital payments in India have seen a CAGR of 50% in volume over the last seven years.