Emerging Ecommerce & India Internet Monthly Report | December

29 December 2023

Emerging Markets ETF & India Internet ETF  Key Takeaways | December

  • The underlying index for the Emerging Markets ETF returned 10.98% in November. Year to date, the index is down -5.73%.
  • The underlying index for the India Internet ETF returned 7.55% in November. Year to date, the index is up 26.76%.

The leading positive contributors to performance for the EMQQ Index were PDD Holdings (Pinduoduo) and Mercadolibre, posting gains of 45.4% and 30.6% respectively. Pinduoduo climbed after reporting a robust set of results for the third quarter, which saw revenues almost double. Meanwhile, MercadoLibre benefitted from a strong showing during the Black Friday shopping season in Brazil. Both are discussed in further detail below.

The two largest detractors for the month were Meituan and Alibaba, falling -17.9% and -8.9% respectively. Despite the declines, both companies reported relatively favorable results for the third quarter. Alibaba saw its earnings improve 21% year over year while Meituan’s adjusted earnings per share climbed 52%.

 

Source of all performance data: HANetf / Bloomberg. Data as of 30.11.2023. Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs your capital is at risk.

 

Emerging Markets Tech News

China’s Pinduoduo reports 94% growth: Chinese e-commerce giant, PDD Holdings, reported a 94% surge in third quarter revenue driven by both positive traction in its local market as well as the success of its cross-border shopping app Temu. PDD's net income increased by 47% to $9.6 billion in the September quarter, exceeding the average revenue estimate by approximately 25%. Analysts expect Temu, launched in September last year, to generate more than $16 billion in revenue this year. Since launching in the U.S., Temu is now available in 48 countries, including across Europe and the Middle East, as well as Southeast Asia and Australia.

India GDP surges past expectations: India's economy exceeded analysts' predictions, growing at a rate of 7.6% in the three months to September compared to the previous year. This performance surpassed all estimates in a Bloomberg survey of economists and notably exceeded the Reserve Bank of India's projection of 6.5%. The robust expansion solidifies India's position as the world's fastest-growing major economy. The growth is attributed to increased manufacturing, rising consumption, and heightened government spending ahead of upcoming elections. Despite challenges such as surging inflation and multiple interest rate hikes by the Reserve Bank of India, the country's economic growth remains strong.

Apple to ramp India iPhone production to 50 million units: Apple and its suppliers are aiming to manufacture over 50 million iPhones annually in India within the next two to three years, with plans for additional tens of millions of units in the subsequent years. If successful, India would account for a quarter of global iPhone production, gradually increasing its share by the end of the decade, while China will remain the largest iPhone producer. Despite challenges such as infrastructure issues and restrictive labor rules, Apple has increased its reliance on India in recent years.

Modi urges Indians to ditch cash for UPI: Prime Minister Narendra Modi urged Indian citizens to shift away from cash transactions and embrace digital payments as part of the government's efforts to promote a digital economy. In the 107th edition of his public outreach program 'Mann ki Baat,' Modi encouraged people to exclusively use digital modes, particularly Unified Payments Interface (UPI), for at least a month. The success of the digital revolution in India has made this transition feasible, according to the Prime Minister. UPI transactions are gaining popularity, leading to a decline in cash circulation, which offers various benefits such as reduced deposit leakage, positive effects on monetary transmission, and higher savings in seigniorage costs. In October, during the festive season, India recorded over 11 billion UPI transactions.

 

 image

For illustrative purposes only. Source: EMQQ Global. 

MercadoLibre GMV jumps 80% for Brazil Black Friday: Mercadolibre, Latin America’s e-commerce and fintech giant, reported that its gross sales for Black Friday in Brazil surged 80% year over year in November. The impressive growth points to the company’s continued ability to take market share from smaller rivals in the region. According to Fernando Yunes, Senior Vice President and head of MercadoLibre in Brazil, the company continues its “objective of sustaining growth records without sacrificing the company's margins.”

 

 

Sources available upon request.

Emerging Markets ETF Performance 
 
As of 30.11.2023

 

1M

3M

6M

YTD

12M

2Y

3Y

SI

EMQQ Emerging Markets Internet & Ecommerce UCITS ETF

-4.68%

-15.45%

-4.68%

-5.36%

24.79%

-44.34%

-48.59%

-9.34%

EMQQ Emerging Markets Internet & Ecommerce Index

-4.64%

-15.28%

-4.24%

-4.73%

25.81%

-43.26%

-47.07%

-4.15%

 

India Internet ETF Performance 
 
As of 30.11.2023

 

1M

3M

6M

YTD

12M

SI

INQQ India Internet Emerging Markets & Ecommerce ESG-S UCITS ETF

1.75%

N/A

N/A

1.75%

N/A

1.75%

INQQ The India Internet & Ecommerce ESG Screened Index

1.81%

4.10%

21.00%

1.81%

16.24%

1.81%

 

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 30/11/2023

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Please remember that when you invest in ETFs and ETCs your capital is at risk.

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