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There are no other two tech markets bound as closely together as that of China and India.
They both have huge populations and therefore vast consumer markets, and they both have skipped the PC era and jumped into smartphones.
There are also things they want from each other.
One is looking to the other for inspiration, while in return, it offers plentiful opportunities in its fast growing market.
For Chinese entrepreneurs, India becomes the “incredible” market with huge potential to explore as Chinese mobile market growth remains stagnant.
While for Indian companies, China, compared with the US, seems to be a more inspiring market for Indian companies with more readily applicable business models and lessons.
With interaction intensified between the two markets, how are internet giants in India dealing with the changes brought about by their more well-heeled Chinese competitors? What are the challenges and opportunities emerging in the interaction process? To find out the answers to these questions, China Tech Insights interviewed Satyan Gajwani, Vice Chairman of Times Internet at the Chindia TMT Dialogue Conference.
Times Internet hosts some of the largest websites in India including The Times of India and The Economic Times, and runs more than 20 different digital properties, ranging between Content, Video, Music, News, to Mobile-VAS, e-commerce and advertising solutions. Across all businesses, they reach about 200 million monthly users.
In this interview, Satyan Gajwani shares with us his insights on new content business models as well as a general view of Sino-Indo tech business interactions, and challenges in the Indian market.
Q: I read a lot about the interaction between the markets of India and China in Chinese media. It’ll be good to hear your side of the current status of that relationship. For starters, have you been watching the Chinese market as an Indian entrepreneur?
Yes. As regards China and India, in many ways, Indian companies look up to Chinese internet companies. It is not easy for us to always read the news because it’s in Chinese, but we very closely try to follow how companies like Baidu, Alibaba and Tencent are changing and evolving.
For me personally, I am very keen to understand how they have pivoted from what were e-commerce and gaming companies into really doing a lot of other things. Because for us, we run so many different businesses that I am at least very keen to learn more about how these companies run many things in parallel.
Q: What are your favorite Chinese products or apps?
WeChat is like the gold standard for us. The way in which WeChat has become a home for so many different use cases is very inspiring for us. We are building something that is in some ways similar as well, and we look very closely at WeChat to understand it.
We think India is going to be somewhat like America and somewhat like China. So some people will use specific apps for certain things, but some people will use things coordinated on a platform. So our goal is to do both of them. This is the Times of India app, but in it we are going to be adding a tab that lets you book taxis, book movie tickets, book a table, do food deliveries, and all of these are one click away, which is very similar to WeChat Wallet. This is all coming from a company that we acquired, which we are integrating into the app now.
Q: I bet UC has also drawn a lot of your attention, because of its ventures in the content business. What do you think of UC’s performance in the Indian market?
What UC has done is to take a browser, and build around it very effectively. I think the question is, and as you might be aware UC News competes with some of our news offerings, as a platform UC News has a lot of users, but in terms of market attention, it’s not yet at the scale of some of the larger media brands today.
So the challenge for UC will be how to become a platform, and how to be sort of a thought leader in news. Because news is a funny business where people associate. UC has a wide population of users, but if you ask the average Indian reader what news he reads, UC won’t be the first to come to mind. So the challenge is how to be big and visible. But they’ve done a phenomenal job with their growth, starting from a browser.
Q: Live streaming is another red hot business in China. What do you think of its development in India?
It is growing in India, but data has been a constraint to its development. Live streaming is very data intensive. When people use data, they have to get good value from it. When you watch a movie or five-minute show you get good value, whereas in a live stream, you might be watching someone at home sitting on their couch, but data is just as expensive. So the challenge is, until data prices are so cheap that people don’t care, live streaming will take time to catch on. But there are platforms that are growing already today in India.
Q: Besides Chinese companies, US giants also have their presence in India. How are Chinese and US rivals different in the Indian market?
Oh that is very interesting. Culturally they are very different. American companies look very linearly at the market. They have a model that worked in America, and then they want to take that model to India. Whereas what we see are two things. Another thing is America and India are very different in terms of customers, while actually India and China are more similar in some ways.
But the other thing is that when Chinese companies come to India, they are much more open-minded to changing for the Indian market, adapting their products and localizing. They do that more than American companies I think. They tend to be a lot more nimble as well. They tend to be faster to adapt and to change, whereas global companies in India are usually what we call “brag to boss”. They get to tell the boss “I’ve launched in India”. But it’s not the real focus.
Q: Alibaba and Amazon are rather active in the e-commerce and payment solution sectors in the Indian market. What are the obstacles now for these businesses?
In general India is ten years behind China today. E-commerce is essentially new for us, only three years old. So it’s still pretty early for India right now. For these businesses I think there are three issues. One is logistics. The infrastructure for deliveries in India is not actually that easy. We were the first in investing in one of India’s largest logistics companies Delhivery.
Things will all get better, but the biggest challenge people tend to neglect is that the average income of an Indian is fifteen percent of the average Chinese. So if you have six times less money than the other, consumption power is much lower. So as people accumulate more wealth, their ability and readiness to spend will increase. But we’re still pretty early in that cycle.
The biggest e-commerce company in India is doing three to five billion dollars in sales, whereas you know, on Double 11, Alibaba will generate more revenue than the entire Indian industry does in one day. So there is still time for the market to develop and it really relates to overall consumer strength, which is the biggest obstacle for Indian development.
Lastly, I think trust is a big question mark. When you go to a store and you take a product, you can feel it, while e-commerce is a habit that people become accustomed to over time. If you trust it, then you will pay. You know today the majority of people are doing what’s called cash-on-delivery in e-commerce. They don’t pay online, because they don’t trust it. Trust is a large long term hurdle to cross. It will take time for us to get there in India.