Structural Changes Are Creating EM Opportunities
COVID-19 has produced long-term structural changes affecting many aspects of life in emerging markets. The pandemic has accelerated existing trends, including the migration to online and adoption of digital platforms. This shift is most visible in e-commerce, which continues to grow rapidly across China, India and throughout Asia. We’re also seeing increased market penetration in certain categories, such as grocery shopping and food delivery. Businesses have reoriented their operations and upgraded digital capabilities to accommodate consumers’ move to online platforms.
The pandemic has also brought about changes to consumer behavior beyond e-commerce that may prove to be permanent. Consumer preferences in work, education, health care, entertainment and transportation have transformed. Working remotely, people are demanding better hardware, software and online access. This development benefits information technology services providers, cloud-based companies, data center operators and 5G network firms. The move to remote learning has been swift, and we expect this move to continue to support the structural shift from in-person to online education. The increased demand for health care and inadequate number of EM medical facilities to deliver services have hastened the adoption of telemedicine. The desire for a healthier lifestyle has fueled demand for athletic equipment and apparel, which is driving growth for athleisure wear makers. The shelter-in-place environment has resulted in a spike in online gaming as well as consumption of streaming music and video. This boom is benefiting online advertisers, streaming content providers and online gaming companies. Finally, bicycle and e-bike makers are experiencing significant backlogs as people steer clear of public transportation to avoid potential exposure to the virus.