June 12, 2024


Delighting finance buffs

What’s Chinese, what’s not? Is boycott pragmatic?

As the rhetoric in India grows over Chinese products in the light of the Ladakh tensions, the realities on the ground show the business relationship between Asia’s two economic giants is too big — and too complex — for any blanket boycott.

Given China’s massive investments in India, identifying what’s Chinese and what’s not and finding a competitive alternative appear to be a tough job in the first place.


In tech space alone, China-linked investments have seen a rise in recent times.

A report published by Gateway House, a think tank associated with the Indian Council on Global Relations, estimates $4 billion of Chinese tech investment in Indian startups.

As many as 18 of India’s top 30 unicorns (startups valued at more than $1 billion), most of them tech-driven, are now Chinese funded, it noted.

Published in February, the report lists 92 major startups in India funded by the Chinese.


Major Chinese firms involved in Indian businesses through strategic investments are Alibaba, Tencent and ByteDance.

The Alibaba Group alone has strategic investments in Big Basket ($250 million), Paytm.com ($400 million), Paytm Mall ($150 million), Zomato ($200 million) and Snapdeal ($700 million).

Similarly, another Chinese group, Tencent Holdings has its investment in Indian firms like Byju’s ($50 million), Dream11 ($150 million), Flipkart ($300 million), Hike Messenger ($150 million), Ola ($500 million) and Swiggy ($500 million).


It’s important to point out here that these Chinese firms are not the sole owner of these platforms. Many Indian and non-Chinese investors hold majority control in most of these companies, making it difficult to classify them as Chinese or non-Chinese.

According to experts, one of the reasons why Indian startups are largely funded by foreign investors is because of the large initial risk involved in creating a market.

“Most Indian venture-capitalist financiers are wealthy individuals/family offices and cannot make the $100-million commitments needed to finance startups through their early losses. For instance, Paytm incurred a loss of Rs 3,690 crore in FY19 while Flipkart lost Rs 3,837 crore over the year. That leaves Western and Chinese investors as dominant players in the Indian start-up space,” the Gateway House report notes.


Another major Chinese presence in India is in the form of TikTok, which has more than 200 million subscribers and has overtaken YouTube in the Indian market.

TikTok’s parent company is a Beijing-based technology firm ByteDance. The group has been in news recently for allegedly censoring anti-Chinese content in India.

According to a 2019 report by mobile data and analytics platform, App Annie, “50 per cent of top app downloads in India were those with Chinese investments, such as UC Browser, SHAREit, TikTok, and Vigo Video, etc”.

These apps have a significant user-base in both rural and urban India.


The dominance of Chinese firms in hardware space is even more.

According to Counterpoint Research, a global industry analysis firm, “the market share of Chinese brands in the Indian smartphone market reached a record 66 per cent during the first quarter of 2019”.

Chinese phone brands Xiaomi, Vivo and Oppo are household Indian names.

However, Xiaomi, one of the leading Chinese phone companies, has announced that it is making some of its models in India.


With growing complexities in investments, identifying a Chinese brand is also going to be difficult.

The Gateway House report mentions that some Chinese funds route their investments in India through offices located in Singapore, Hong Kong, Mauritius, etc. “For example, Alibaba’s investment in Paytm was by Alibaba Singapore Holdings Pvt. Ltd. These don’t get recorded in India’s government data as Chinese investments,” the report noted.

A lot of China-made hardware, electronic items and home utility products sold in the open market don’t have any brand name to identify with.

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