Macro Trends in Mobile May Create Growth Opportunities for Ecommerce | EMQQ

30 July 2019

Mobile has quickly become the favoured method of accessing the internet for a large number of users, especially in emerging markets. Many people in emerging markets are now earning enough income to warrant buying a device that connects them to the internet, and for many of these people, they choose to buy a mobile device rather than a computer.

App Annie compiled a report containing various statistics about trends in mobile, here are some statistics that are especially interesting when taken in consideration with the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) and its holdings.

App Downloads Dramatically Increasing 

Global App Downloads exceeded 198 billion downloads in 2018, which was a 35% increase from 2016 downloads; this growth was fuelled in large part by emerging markets. This growth included a 70% increase in China and a 165% increase in India.

People Are Spending More Time on Mobile Devices 

Due to consumers in emerging markets leapfrogging computers and going straight to mobile devices, many tasks that require internet are carried out by mobile products. This may be the reason why users in emerging markets on average will spend 50% more of their day on mobile devices than their counterparts in mature markets such as the US and Canada.

Companies such as Alibaba, Tencent, and Baidu have capitalised on this increase in downloads and were 4th, 6th, and 7th respectively in worldwide combined iOS and Google Play app downloads. Tencent was also 3rd worldwide in combined iOS and Google play game downloads.

Consumers Are Spending More Money on Apps Than Ever Before

Global App store consumer spend reached $101 Billion in 2018, a 75% increase from 2016 which included a 70% increase in consumer spending in the US and a 140% increase in China as well. Gaming apps accounted for approximately 74% of App Store spending.

In many countries, both emerging, such as Brazil and Indonesia, and mature, such as the US and Japan, consumer spending on mobile is growing at a faster rate than that of the country’s GDP. This growth was fuelled for the most part by a 120% increase in consumer spend on non-gaming apps from 2016. This increase in spending was in large part due to in-app subscriptions.

Tencent, Baidu, and Alibaba are 1st, 5th, and 8th, respectively, in worldwide combined iOS and Google Play consumer spend on apps. Tencent and NetEase are 1st and 2nd, respectively, in combined iOS and Google Play game consumer spend.

How This Effects EMQQ and Its Investors 

EMQQ is designed to provide investors with exposure to the internet and ecommerce sectors of the developing world. The historical growth of mobile devices in the emerging markets may make this an opportune time to invest.  Aided by growth in emerging market’s such as India and Indonesia, downloads and spending on mobile, especially over the last two years has seen great growth.

EMQQ holds many of the companies who are benefiting from this boom in mobile spending such as Tencent, Alibaba, Baidu, and NetEase. With the current state of the mobile market’s growth we feel that it is a great sector for investors to look into.

Find out more about the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) here

As of 29th July 2019, the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) held 8.04% of its weight in Tencent, 8.0% in Alibaba, 5.57% in Baidu and 4.61% in NetEase. 

Read our EMQQ Whitepaper "The Great Confluence" here

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