Google and Amazon already being surpassed

Google and Amazon already being surpassed? There is a perception that the leading edge of software, service and e-commerce businesses remains with the well-known developed market companies such as Amazon and eBay, with Emerging Market companies following behind. That is not a view to which we subscribe. While Google is an enormously successful business, with an operating margin in the most recent quarter of 22.5%. In China, Tencent has an operating margin of 31.9%, partly from the incredible achievement of having US$1.8bn in quarterly revenues from online gaming alone. Alibaba, the Chinese peer of Amazon and eBay, reported most-recent quarterly revenues of US$2.5bn on US$80bn of gross merchandise value (GMV, the value of all products shipped). What is more impressive, though, is Alibaba's 43.4% operating margin, compared with 17.9% at eBay and an operating loss at Amazon. There are numerous Emerging Markets giants with global scale, robust and innovative business models, high levels of profitability and years of strong growth ahead. Who else are we watching? Click here for more from J O Hambro Fund Manager James Syme (VIEW LINK)