Chinese are dominating industries like mobile phones and are about to grab the lion’s share of the television and home appliances industries. China is now emerging as one of the biggest investors in Indian start-ups taking over Indian markets with a storm.
How China tookover Indian markets
China is increasingly seeing immense opportunities in India as a market. Chinese companies in any sector find India as the only market that has the possibility of being as big as the Chinese market. No other market comes even close. The Chinese have been getting into the Indian business arena aggressively for some time.
The Chinese are dominating industries like mobile phones and are about to grab the lion’s share of the television and home appliances industries. Data is the new oil. The Indian market is only second to China’s in terms of its offerings. In data security India has one of the poorest regulations and protections. A combination good for China, less so for us.
China is now emerging as one of the biggest investors in Indian start ups and closing the gap with the US and Japan. Companies like Alibaba and Tencent are major shareholders in many of India’s biggest start-ups. Alibaba bought into Snapdeal and Paytm via multi hundred million dollar investments in 2015 and the pace has only quickened since then. In 2017, Tencent invested in Gaana (music streaming) and Swiggy (food delivery) in major deals, having backed Byju’s (education) and Ola (ride hailing) the year prior. The pair also launched local cloud computing services inside India last year.
— GreatGameIndia (@GreatGameIndia) October 16, 2019
Beyond those two, Xiaomi has gone beyond selling phones to back local companies and develop local services for its customers. Their sharing of technological expertise is also helping them scale up. This influx of Chinese capital close to $10 billion, by some estimates could change the nature of economic engagement by China with India.
As everything in China is regulated, Chinese companies are used to regulation. The Chinese companies can adapt to Indian regulations very fast. Example is how quickly Alibaba backed PayTM has pivoted to take advantage of either changing regulation or policy void. Chinese companies, with their experience of working around rigid regulation in China and their investments in “Indian” tech companies, will be better placed to deal with India’s not very comprehensive tech regulations to come up shortly.
Chinese Investment in IT Sector
Since 2015, around $7 billion in Chinese funding has poured into the Indian technology sector. Chinese companies are now major shareholders of some of India’s biggest tech companies. Chinese tech companies have over the past two years also launched ambitious tailor made products for the Indian market. Chinese apps launched in India have many commonalities like:-
- Deep pockets for marketing expense.
- Focus on vernacular India users.
- An addictive user interface.
- Racy content.
- Quick iterations and execution cycles.
- Cheap offerings.
Just two of China’s three big BAT (Baidu, Alibaba and Tencent) technology firms – Alibaba and Tencent – have invested close to $3 billion in various Indian start ups. The third of the group, Baidu, has been slower off the mark. The investment is in diverse fields. According to a KPMG study, from 2015 till 2017 end, the biggest sectors have been:
- E-commerce ($3 billion)
- Transportation ($1.7 billion)
- Fin tech ($750 million)
- Travel ($450 million).
In 2015, Alibaba pumped in close to $700 million in Paytm’s parent company, giving it a 40 percent stake. Alibaba also has investments in Snapdeal and Zomato, while Tencent has invested in Ola, Flipkart and Practo. Similarly, travel portal C-Trip took a key stake in MakeMyTrip. Alicloud is building its second cloud storage centre in India. At a different level, ShareChat has large investments from Xiaomi Singapore and Shunwei Capital.
The @FAO #SeedTreaty was supposed to protect #SeedSovereignty of farmers & biodiversity rich countries of the south including #India .High on Nov agenda is digital sequence information (DSI), digital patenting by #PoisonCartel & #SurveillanceCapitalism https://t.co/V4X52zWzLp https://t.co/ynH6sQ472l
— Dr. Vandana Shiva (@drvandanashiva) October 18, 2019
The Great Firewall of China has kept the US digital giants at bay. But Chinese digital giants are competitive and ahead of the global giants in many ways. The messaging app WeChat had payment options years before WhatsApp launched it. Chinese companies like Bytedance, which is behind Tiktok and the widely popular Chinese original, Douyin, is among many that see India as the next big frontier.
China uses the successes of its e-commerce experience to help Indian companies to scale up in a similar way. Chinese entrepreneurs understand the nuances of the India market. To capture Indian vernacular content market. ByteDance has a local
team entirely based in New Delhi.
A report from Factor Daily found that 44 of the top 100 Android apps in India were developed by Chinese companies, up from just 18 one year prior. The focus is on Android because it is the overwhelming choice of operating system among India’s estimated 500 million internet users.
The list of top Chinese apps includes major names like ByteDance, the world’s highest-valued startup, which offers TikTok and local language news app Helo in India and Alibaba’s UC browser, as well as lesser known quantities like Tencent backed News Dog and quiet yet prolific streaming app maker Bigo. Citing data from Sensor Tower, the report found that five of the top 10 Android apps in India are from China, up from just two at the end of 2017.
Chinese Mobile Phones
Xiaomi is already well entrenched in the Indian market. It boasts revenues of `23,000 crore and is the leader in mobile phones with a 29 per cent market share. Xiaomi’s revenue grew by around 150 per cent in 2017 and it has also captured a large share of the television industry by slashing prices on what it says are quality products.
According to leaked information of a high-level meeting, the United States and India’s failure to reach a long-expected trade deal on Sept. 24 has sparked fears of a full-fledged India US #TradeWar.https://t.co/CusYEQWAdB
— GreatGameIndia (@GreatGameIndia) October 1, 2019
Chinese Electronics, Home Appliance, Automobile and Tech Sectors
In technology, China doesn’t consider India as competitor at all. It has set its eyes on toppling the US’s dominance in every aspect of technology. The irony today is that US has begun buying robots from China. The International Federation of Robotics says that 40 per cent of global robotics sales will be by China. Chinese investments in India in the field of electronics, home appliance, automobile and
tech sectors are rising rapidly.
Xiaomi has entered multiple new segments like power banks in which it’s the market leader. Other newer products include a range of smart devices, including air purifiers, sound bars for televisions and accessories that connect to smartphones like bluetooth headphones.
There are companies like Haier, TCL and Midea Group, which are Chinese but sell Toshiba branded products. Haier is investing over ₹3,000 crore to build a new plant in Greater Noida that will make two million refrigerators and a million each of washing machines, air conditioners and televisions. Midea, investing some ₹1,300 crore to make air conditioners in partnership with Carrier and a range of other household appliances. Earlier, in 2017, the Midea Group invested ₹800 crore in a new plant in Pune.
US oil refineries that are unable to sell dirty fuel waste product at home are exporting vast quantities of it to India. In 2016 US sent more than 8 million metric tons of dirty petcoke to India enough to fill the Empire State Building eight times. https://t.co/TPXrOcWEkn
— GreatGameIndia (@GreatGameIndia) September 22, 2019
Indians, in earlier years, had reservations about Chinese brands but that seems to have been overcome by the new wave of products from companies like Xiaomi, TCL and Haier. In the auto industry, though, it’s a different story. Companies like Shanghai based SAIC Motor are using the MG (Morris Garage) badge to overcome customer reservations. The company’s ads stress the MG name and its vintage
British heritage. Similarly, the company that makes Volvo vehicles that sell in India is owned by Hangzhou based Zhejiang Geely. The company stresses its original Swedish parentage.
One automobile company that’s happy to come to India using its own distinctly Chinese brand name is bus company BYD Auto Industry, the world’s largest electric vehicle company in partnership with a local company. It has already won contracts in several cities for its electric buses. Crucially, but unsurprisingly, the three automobile companies have brought also a large clutch of Chinese automobile component companies. Many Chinese companies are using a ploy of coming into India under cover of a Swedish or Japanese brand name successfully. Miniso, a Chinese retail chain uses the name of a Japanese retailer that it bought some years ago.
Today number of states are eager to invite Chinese investment in their respective states to augments their economies. The Government of India has a sensitive task to oversee the security aspects as well as the overall economic plan of the Government.
Maj Gen P K Mallick, VSM (Retd.). Send in your tips and submissions by filling out this form or write to us directly at the email provided.
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