2 Tech Ecosystems and Why It Matters for Investors

Netflix is not available in only four countries/regions in the world; Syria, North Korea, Crimea and, finally, China.

That oddity is a great microcosm of the bifurcation of global tech ecosystems into those of China and then the rest of the world (read: US-based tech).

In China, nearly everyone will use Bilibili, Kuaishou, WeChat, Baidu, Tmall etc. but everywhere outside of China, your Apple iPhone, Google search, Insta/FB, Netflix, DocuSign, Zoom will be the default option in that niche.

There's a strong argument to be made that Chinese tech firms don't need the rest of the world - 1.4 billion people is a massive market in itself.

Growth potential

Yet from a total addressable market (TAM) perspective, at least to me, American tech innovators tend to have superior long-term growth prospects due to the international expansion angle.

Ironically, that's something Netflix bears a while back failed to foresee. In 2015, about 28% of Netflix's overall revenue came from outside the US and Canada. Just five years later (in 2020), that figure had jumped to 55% of overall revenue.

Disclaimer: I own both US and China tech stocks! Just looking at global businesses through the lens of a long-term investor.