It’s not Modi Alone Who goes to China!

Indian entrepreneurs flying to China to pick up tips in the art of scaling up startups
Scores of Indian entrepreneurs are making a beeline to startup hubs in Shanghai, Beijing and Guangzhou to pick up tips in the art of scalability from their peers in the world’s largest ecommerce market.Egged by their investors who are making connections between the Tiger and the Dragon, a number of Indian entrepreneurs have been visiting their Chinese counterparts and coming back amazed with their scale of operations.

“The Chinese are solving the same problem(s) as we are,“ said Albinder Dhindsa, chief executive of Grofers, who is back in Gurgaon after a weeklong trip to meet entrepreneurs in Shanghai and Beijing.

“But if an Indian grocery etailer is doing an average of 6,000 deliveries a day, these startups are doing about 80,000 a day.“

Grofers, an ondemand grocery delivery startup, handles about 5,000 orders daily . orders daily.

Several investors and entrepreneurs see striking similarities in the startup ecosystems of India and China. “The Indian startup ecosystem is like the China of 2006 when valuations there were reasonable,“ said angel investor Rajan Anandan, who led a delegation of about 20 investors and entrepreneurs from India to Chinese firms such as Alibaba and Ctrip last year.

And a key lesson to learn from the Dragon is “achieving a path to profitability despite scaling up“, said Anandan, also Google’s vice president and managing director of Southeast Asia. Venture capital firm Sequoia Capital, which took part in a $35-million ( `. 224 crore) funding round in Grofers, is also being instrumental in connecting its portfolio startups such as Oyo Rooms and Grofers to Chinese entrepreneurs. Other startup founders such as Housing CEO Rahul Yadav, Greendust CEO Hitendra Chaturvedi and executives from Flipkart and Snapdeal, too, have undertaken similar voyages to the Middle Kingdom.

Housing’s Yadav just returned from China after meeting a few Chinese real estate entrepreneurs and Shanghai-based investors interested in India. “Our team was in China to understand the market and learn from internet leaders such as Soufun in the online real estate listings space, which have built billion-dollar businesses,“ said Advitiya Sharma, cofounder of the real estate search website.Beijing-based Soufun Holdings is valued at over $3.4 billion on the New York Stock Exchange.

WINNING EDGE

The main advantage for startups in China is the enormous size of the market. The country has an estimated 690 million people hooked on to the Internet and 520 million using smartphones. In India, about 310 million people were online last year, including 140 million through smartphones. Chinese ecommerce giant Alibaba alone boasts 350 million users, including 289 million on mobile.

Consequently, China’s ecommerce market is estimated to touch $300 billion this year, whereas India’s was valued at $10 billion in 2014. The fact that the Chinese venture capital market is the biggest outside of the US, with investments totalling $16.2 billion last year compared to $2.1 billion in India, also helps.

“Anything that involves a large market is much easier to do in Chi na, where it does not have to struggle with issues like connectivity and a uniform tax code (major hurdles in India),“ said Tarun Khanna, professor at the Harvard Business School. Another factor for China’s success is the involvement of its large diaspora in starting companies, which India can learn from, he said.

For employees of online payments startup Paytm, a visit to China is like taking an executive MBA course, said senior vice-president Amit Lakhotia, who has been to Beijing and Guangzhou multiple times. “Paytm employees have learnt to manage offline payments, escrow accounts and fraud detection mechanisms for payments through their counterparts in (Alibaba’s payment gateway) Alipay.“

Some experts say the Dragon, too, could learn from India. “Startups focused on digital consumers have a lot to learn from China,“ said Sharad Sharma, angel investor and founder of product think-tank iSpirt. “But Indian software platform companies such as FreshDesk, OrangeScape and IT infrastructure players such as Druva and InMobi have a lot to teach Chinese startups about how to be global winners, not just local.“

 Source: The Economic Times
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Author:

Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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