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Emerging Markets Enter the Metaverse

The metaverse, a virtual environment where users can enjoy fully immersive experiences, is designed to allow people to meet, play, or work using virtual reality or augmented reality-combined technology headsets, glasses, applications, or other devices. In addition to being applied within the gaming sector, the metaverse also has practical applications for countless other industries, such as banking, travel & leisure, education, entertainment, retail, manufacturing, and healthcare, among others.

As it develops, the metaverse could have the potential to enhance virtual living standards, combine digital platforms, provide insights on patients, enable customers to test products before purchasing, make the gaming world more immersive, and allow tourists to visit places around the world without leaving their houses.

Analysts at Morgan Stanley predict that the metaverse’s initial total addressable market in China will be approximately $4 trillion as it replaces the mobile internet with a more “immersive experience.” But once the metaverse begins disrupting offline activity, such as vehicle test drives, real estate showings, and education, that opportunity could swell to $8 trillion.

If the metaverse is indeed the future of social media, virtual reality, and gaming, then emerging and frontier market companies — particularly the tech giants — will have to embrace the metaverse and find a way to develop and adapt to appeal to the youngest segment of its current and future customers.

Below is a list of holding companies in the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ) that are taking part in genesis metaverse. Almost a third of EMQQ’s investable universe is already involved in this space. Click here to see EMQQ’s top ten holdings.

Source: EMQQ Index, as of November 30, 2021.

Although the metaverse is still in the nascent stages of being defined, these companies can combine virtual reality with artificial intelligence and real-time adaptability to user tastes, which usually requires big data and agile cloud capabilities. Some Chinese tech companies including Alibaba, Baidu, Netease, and Tencent have already patented and/or experimented with metaverse technologies.

South Korea is also a leader in this space. In fact, this month, SoftBank announced a major investment in Naver’s metaverse business called Zepeto.

“There is real excitement among all the established and emerging companies and investors involved in the metaverse,” said an email issued by EMQQ to prospective investors. “These market players are spread across the world and are aggressive in developing new technologies to lead the market and improve revenue growth.”

The email added: “Furthermore, the market players to stay ahead of the competitive landscape are unraveling strategic initiatives like mergers and acquisitions, new product portfolios, and technological innovations. The metaverse is here, and with nearly a $1 trillion dollar market up for grabs by 2028, it should be exciting to immerse ourselves into the reality of the metaverse economy.”

For more news, information, and strategy, visit our Emerging Markets Channel.

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