By JAMES CHENEVIX-TRENCH
In the past decade, digitisation has redefined the global economic landscape, opening up entirely new economies and creating fertile ground for innovation and growth—particularly in emerging markets.
While developed economies followed a linear path through the evolution of digital infrastructure, many emerging economies leapfrogged traditional stages of development. This paradigm shift has laid the foundation for a compelling new investment strategy focused on the next generation of global growth.
Leapfrogging the West: the wireless revolution
In the 2010s, businesses and consumers in emerging markets bypassed legacy systems—like fixed-line broadband—and adopted wireless technologies at an extraordinary pace. Mobile phones and wireless internet access brought connectivity to millions, enabling the rise of digital services in finance, commerce, transport, and healthcare. The rapid adoption of mobile technology democratised access to information and commerce, allowing local companies to scale quickly and challenge established business models from the West.
This unique development path meant that, rather than replicating the models of Western economies, emerging market businesses often built leaner, more agile digital ecosystems tailored specifically to the needs of their local populations. Today, many of those businesses are coming of age, reaching scale and profitability, and offering distinct opportunities for forward-looking investors.
Maturing Giants: Mercado Libre and Grab
Two standout examples of this maturation are Mercado Libre in Latin America and Grab in Southeast Asia—both companies exemplify how businesses that grew out of specific regional challenges have evolved into digital powerhouses.
Source: Mercado Libre
Mercado Libre, often dubbed the “Amazon of Latin America”, has thrived in a region where traditional retail infrastructure is limited and credit card penetration is low. By combining e-commerce with a robust fintech arm—Mercado Pago—it addressed two critical barriers simultaneously: access to goods and access to financial services. In Brazil, where smartphone usage is high and the population is young and urbanising rapidly, Mercado Libre has been able to harness the demographic dividend. The result is a flywheel effect: more users drive more merchants to the platform, increasing transaction volumes and deepening the ecosystem. This kind of vertical integration is what makes these companies more than just “copies” of their Western peers—they are often more deeply embedded in their markets.
Grab, which started as a ride-hailing platform in Malaysia and expanded across Southeast Asia, has similarly evolved into a super app, offering everything from food delivery to mobile payments. Southeast Asia’s urban sprawl, youthful population, and fragmented infrastructure have created strong demand for services that bring convenience and efficiency to daily life. Grab’s ability to tap into these demographic realities—rising middle classes, increasing smartphone penetration, and a desire for digital-first services—has helped it build resilience and long-term growth potential.
Source: Grab
The Next Frontier: Africa and Jumia Technologies
As we look to the next decade, Africa emerges as the next major frontier for digital innovation—and Jumia Technologies is at the centre of this transformation.
Source: Jumia
Jumia was initially seen as a promising e-commerce play in Africa, aiming to replicate the Mercado Libre or Amazon model. However, early operational challenges and execution missteps saw the company struggle to find its footing. That narrative is now changing under the leadership of Francis Dufay, who took over as CEO and has shifted the business toward a more disciplined, sustainable growth model. Under Dufay, Jumia has cut costs, exited unprofitable markets, and narrowed its focus to high-potential regions where it can establish deeper customer and vendor relationships.
Africa’s growth story is as much about demographics as it is about digitalisation. The continent is projected to account for over half of global population growth by 2050, with a median age under 20. Smartphone penetration is rising fast, and financial inclusion is expanding via mobile money platforms. Despite infrastructure challenges, these trends create a powerful backdrop for Jumia to scale its marketplace and fintech offerings—provided it can execute with discipline.
Source: Jumia
Jumia’s future lies not just in being an e-commerce platform, but in becoming a critical enabler of commerce in economies that are still largely informal. Its logistics network, payments infrastructure, and local knowledge give it a defensible edge in a high-potential, underpenetrated market.
Investing in the Emergent Digital Economy
Our future strategy is built on identifying and investing in these transformative shifts across Emerging Markets. We believe that the most exciting investment opportunities today are not in replicating Silicon Valley in Lagos or São Paulo, but in understanding the unique dynamics of each market and backing the businesses that are solving real problems at scale.
These are not just growth stories—they are structural stories. As wireless infrastructure, financial inclusion, and digital ecosystems continue to deepen, we are witnessing the birth of entirely new economic frameworks. The companies that navigate these environments successfully are not only building products; they are building economies.
Investing in this space requires vision, patience, and a deep understanding of local context—but the rewards can be substantial. From São Paulo to Jakarta to Lagos, the digital future of emerging markets is being written today. The Cerno Future Strategy aims to access these opportunities.
To find out more about the Cerno Future Strategy, click here.
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