The Internet’s About to Explode in Latin America

The “internet ecosystem” — cheap, powerful devices, faster internet connections, communities of web entrepreneurs — is just getting started in Latin America.

Not long ago I was in Cuba.

I’ve been there three times now. Each time 10 to 15 years apart.

The biggest change I notice now is the same phenomenon sweeping the rest of Latin America…

Internet addiction, pure and simple.

Walk around Havana, turn a corner at a known Wi-Fi hotspot near a park or plaza — and suddenly you see dozens of people leaning against buildings or sitting on benches — all of them staring at their smartphones, same as here.

The visit puts an exclamation point on the growth of internet usage that most of us overlook.

According to a recent survey of online habits, Brazil and Colombia ranked among the top 5 countries in the world in terms of “screen time.” (The Philippines was ranked No. 1, where web surfers spent an average of more than 10 hours a day on their phones.)

The part I find so exciting is that the “internet ecosystem” — cheap, powerful devices, faster internet connections, communities of web entrepreneurs — is just getting started in Latin America and the rest of the emerging market sector.

Exploring off the Beaten Path

U.S. e-commerce rises around 12% to 15% a year. But it annually grows by 30% or more in emerging market countries:

  • Turkey, 37%.
  • Mexico, 50%.
  • Indonesia, 78%.

And that’s just naming a few.

I already have three positions based on this gigantically disruptive trend in the Total Wealth Insider portfolio, and they’re all pushing nicely higher by double-digit amounts.

Here’s something else to think about: The U.S. market is largely tapped out when it comes to finding investment ideas that aren’t already at or past their peak growth, and fully (or over-) valued in price.

On the other hand, if you’re willing to explore a bit off the beaten path, you find plenty of undervalued, little-known stocks growing by leaps and bounds if you extend your vision beyond just the U.S. (and perhaps China and Europe).

Latin America is a great example.

Latin America Embraces the Internet

In the U.S., household broadband penetration is 82%. It’s growing at 3% a year.

Among Latin America’s five largest countries — Brazil, Mexico, Argentina, Chile and Colombia — broadband penetration is roughly 50% … but growing as fast as 10% a year.

It’s the same story for wireless broadband.

In the U.S., about 90% of mobile phone users subscribe to high-speed 4G data networks (with 5G on tap in the next few years).

Yet among the five largest Latin American countries, only 27% of mobile users have access to high-speed wireless data.

In short, Latin America — and emerging markets in general — are hitting their sweet spot for embracing the internet.

U.S. investors are wise to pay attention and start taking advantage of this disruptive years-long trend in the making.

Kind regards,

Jeff L. Yastine

Editor, Total Wealth Insider

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