China and India: home to about a third of the world’s population and two booming ecommerce markets. Coming out of 2014, which was designated as a Year of Friendship promoting exchange between the countries, it makes sense that companies on each side would move toward working together.
Four is only a handful of investments, but it’s the staggering ticket sizes that stand out. Internet giants in China are seeing huge potential in India’s web and mobile markets.
One97 (Paytm): Alibaba, ANT Financial invested US$890 million
A vibrant mobile ecosystem was Alibaba’s goal when it set out to invest in India’s Paytm, owned by One97. Ant Financial, Alibaba’s financial arm, made its initial investment in February, and Alibaba joined in at the end of the transaction.
Ant and Alibaba’s investment marks the most recent in a long line of investors in Paytm, including Intel Capital and Silicon Valley bank. Alibaba’s previous overseas investments include the messaging app Snapchat and the Uber-like Lyft. Though Alibaba’s list seems to include anything that’s going well in the mobile market, it does tend to be choosy about who it lets into the club. Its investment into Lyft, for example, is at least partially motivated by working against Uber, a major competitor of Chinese company Didi Kuaidi.
Founded in 2000, One97 is a mobile marketplace based in New Delhi. Paytm is its flagship brand. Launched in 2010, Paytm processes payments for India’s mobile customers. Users can use the app to top up their mobile payments, buy tickets to events like concerts, book hotels, download music via SMS, watch videos, access entertainment news, and play games. Paytm boasts about 100 million users.
Users of Paytm can add money to a virtual wallet, then use that money to pay bills, recharge their public transportation cards, and buy bus and theme park tickets. The site also offers discounted deals on mobile phones.
Ola: Didi Kuaidi invested US$900 million
Founded in 2010, Ola is India’s most successful on-demand transportation app, much like Uber and Lyft. China’s Didi Kuaidi, another cab hailing app, hopped on the latest in several rounds of funding in the Indian app in the middle of November. The round was led by Tiger Global Management. Tiger Global has played a major part in funding Ola, showing up over and over again in the app’s funding history.
Didi Kuaidi, the product of a merger between China’s top two ride apps that took place in February, is taking steps to dethrone its biggest competitor, Uber. Its previous investments include US$100 million into Lyft, Uber’s US rival. The company also played a part in a US$350 million funding round for GrabTaxi, Uber’s biggest rival in Southeast Asia.
Snapdeal: Alibaba invested US$500 million
Snapdeal, much like Paytm, is an online marketplace. It sells mobiles, tablets, clothing, books, etc. The site regularly promotes limited offers and sales and sometimes offers cashback.
Ecommerce is Alibaba’s game, so it’s little surprise that the Chinese company has decided to lead Snapdeal’s latest funding round, in which several other investors participated, including Softbank.
Practo: Tencent invested US$120 million
Tencent, China’s other internet giant, led Practo’s latest round of funding. Alibaba tends to be more conservative with its investments, while Tencent seems happy to back younger-stage startups. Healthcare startup Practo was founded just this year, though to its credit it’s managed to raise a lot of money from investors including Sequoia Capital and Google Capital.
Practo is a booking app that helps patients find and compare healthcare professionals. They can also use the app to schedule appointments. Doctors can use the app to schedule and keep track of patients and laboratory tests. Patients can also use the app’s booking functions to book spas, salons, and gyms.
Development-wise, it wouldn’t make sense to call China and India competitors yet, but it’s worth noting that many of the areas covered in 2015 – ecommerce, cab hailing, and e-payments – are all areas in which China is strong as well. A lot of the same names pop up on this list, and it’s no secret that Chinese companies – perhaps very wisely – love to stick together rather than compete.
A hefty investment from Alibaba or Tencent could well be an invitation to join the VIP club of ecommerce, which isn’t a bad place to be. Building a regional presence is certainly in Chinese companies’ best interest. I, for one, would love to see this list next year, because the way ecommerce is going in India, it’s likely to get longer.
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