As we move pass the half-way point of the year, global markets remain unsettled by tariff disruptions, US growth concerns and lingering foreign-policy challenges. In this environment, with much of their revenue generated either domestically or regionally, emerging market economies and companies are showing structural resilience and provide a compelling growth opportunity.
China and India stand out. Home to nearly three billion people between them, the real story lies in the transformative consumer and technological shifts underway. China is not only a massive consumer market but is a global technology leader, most notably in electric vehicles and battery technology.
Local champions such as CATL, which dominates the global electric vehicle battery market with a 40% share, and BYD – with 15%, the world’s leading electric vehicle manufacturer – highlight China’s ambition.
India, meanwhile, is emerging rapidly as a vast consumer market underpinned by sweeping reforms, infrastructure expansion and digital inclusion. Domestic consumption drives 60% of GDP.
The success of the Aadhaar identity system and the surge in affordable smartphones have propelled financial inclusion and e-commerce adoption. Companies such as Indigo Airlines and Bharti Airtel meanwhile are capitalising on India’s infrastructure growth and ambitious middle class.
“With much of their revenue generated either domestically or regionally, emerging market economies and companies are showing structural resilience and provide a compelling growth opportunity.
Latin America is enjoying relative stability, buoyed by favourable trade dynamics, resilient currencies and improving governance across key markets.”
For its part, Latin America is navigating the current landscape well. The region is enjoying relative stability, buoyed by favourable trade dynamics, resilient currencies and improving governance across key markets. At the forefront is MercadoLibre, the region’s leading e-commerce platform and dominant force in digital payments – offering exposure to both consumer growth and financial inclusion.
Itaú Unibanco, Latin America’s largest bank, is another standout. With more than 55 million customers and a growing digital footprint, Itaú reflects both the maturity and ongoing transformation of financial services in the region. Meanwhile, LATAM Airlines, South America’s largest carrier, is rebounding as regional mobility and tourism accelerate.
Deep network effects
Interestingly, Sea Limited in Southeast Asia is replicating the MercadoLibre playbook – building an integrated ecosystem across e-commerce (Shopee), digital payments (Monee), but including entertainment (Garena). These integrated models are powerful because they generate cross-platform synergies, producing deep network effects and user retention.
This is especially impactful in emerging markets where traditional infrastructure is lacking, banking penetration is low and the rise of digitisation enables rapid adoption. For professional investors and their clients, the message is clear – emerging markets deserve a place in portfolios, but success requires careful stock selection. With more than 2,500 investable companies, focusing on those delivering strong returns on equity, cash generation and profit growth is key.
John Ewart is an investment manager at Aubrey Capital Management
