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Alibaba, Tencent lead nation's technology forays in India

By Cheng Yu | China Daily | Updated: 2020-02-03 08:20 菲律宾申博太阳城官网
Prospective Xiaomi consumers line up to enter the company's new product launch event in New Delhi. [Photo/Xinhua]

Prominent Chinese internet-based companies are riding an India wave to invest big time in the subcontinent, while others are forging cooperation agreements with local firms in their bets on the "not-to-be-missed "market for new growth.

Led by Alibaba Group and Tencent Holdings, Chinese firms invested in more than 16 companies in India last year, covering sectors like e-commerce, logistics, financial services, and social media.

Other big-ticket Chinese investors included Meituan-Dianping, ByteDance and Didi Chuxing, which have aggressively expanded their footprint in India.

TikTok, the online short-video platform of ByteDance, has quickly gained a strong presence in the Indian market since its launch in 2017. It boasts more than 200 million users are active on its mobile app.

The rapid rise of TikTok is attributed to the fact that more than half of India's 1.3 billion people are under the age of 25 who crave to be part of new online trends.

Meituan-Dianping, China's on-demand service platform covering food delivery to hotel ordering, invested in Indian food delivery unicorn Swiggy in December 2018, whose market valuation was estimated to be $3.3 billion at that time.

Commenting on the investment, Meituan-Dianping founder Wang Xing said the firm hopes to leverage its expertise in the Chinese digital market in big overseas markets like India.

Sanjay Nath, managing partner at Blume Ventures, told India's Economic Times newspaper: "The newer breed of Chinese giants sees India as the 'next China', a not-to-be-missed massive consumer opportunity."

In December, Xiaomi Corp launched a consumer finance service online in India aimed at young professionals and millennials. As one of the biggest smartphone brands in India, Xiaomi hopes to expand its sizable local user base across more internet-based services.

A report from market research company Boston Consulting Group noted that India's digital lending sector alone is expected to be worth about $1 trillion by 2023.

During India's biggest festival of Diwali in late October, Xiaomi announced it sold 5.3 million smart devices, including more than 3.8 million smartphones.

Latest data showed that the firm has set up about 2,000 Mi stores and seven factories across India, creating over 20,000 jobs in all.

As part of their expansion in India, Chinese internet companies are teaming up with venture capital players and private equity firms, to explore investment options in the market.

"If VC firms cooperate with Alibaba and Tencent, their portfolio of invested companies can leverage better resources and professional experience, and put themselves into a relatively stable business ecosystem," said Guo Ruyi, managing partner of China TH Capital, an emerging boutique investment bank.

The Indian market is a rich mix of localization and globalization; so, Chinese startups are bound to face fierce competition, Guo said. "After cooperative investments, the invested companies have a good opportunity to accelerate development with better resources.

"Such a way of investing is a more stable one as it would help reduce the cost of trial and error. Alibaba and Tencent have entered the market for long-term play and have deeper understanding of the local market and abundant overseas experience as well."

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