June 30, 2020

TikTok ban: What about the tight hold of China’s BAT trinity

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While the government has announced a ban on 59 apps, that’s not the end of the line when it comes to Chinese presence in the Indian app ecosystem. Chinese investors have deep penetrated the Indian startup landscape. Not only apps, Chinese backers have pumped in money in the e-commerce segment, payments platforms as well as streaming services.

According to a report by think tank Gateway House, as many as 18 of the 30 unicorns in India are backed by Chinese investors. Tech titans, the BAT companies — Baidu, Alibaba and Tencent — as they are called in China are also a significant part of these investors. The BAT trinity has a soft spot for all things Artificial Intelligence, Internet of Things and fintech. While Baidu has been more cautious in its approach, Alibaba and Tencent have aggressively invested in Indian companies.

Alibaba and Tencent have their hands in some of the biggest homegrown companies including Paytm, Zomato, Byju’s, Ola, Flipkart and Swiggy.

Also read: ‘$100 billion? May be not!’: How TikTok ban will impact ByteDance’s valuation

According to Gateway House, Alibaba Group has made inroads in sectors such as e-commerce, social media, fintech, logistics and more. It backs Paytm, Paytm Mall, BigBasket, Zomato, Snapdeal, Healofy, TicketNew, Vidooly, Rapido and Xpressbees.

Tencent, on the other hand, has its presence in e-commerce, gaming, logistics, education, fintech and more with investments in Flipkart, Byju’s, Ola, Swiggy, Udaan, Dream 11, Hike, Gaana, Practo, Doubtnut, Niyo, Khatabook, MXPlayer, Mygate, Pine Labs and PocketFM. 

Baidu that has taken a backseat in India is also looking to make inroads in the Indian market. CEO Robin Li who visited India this year delivered a keynote speech on AI at IIT Madras. “India is one of the fastest growing smartphone markets in the world, and India is also a very large developing country right next to China. We’ve seen fast growth for both countries over the past few decades. And, I think, for the next decade, there will be more opportunities for us,” he said during his address. Baidu has its presence in the Face Emoji keyboard.

Also read: TikTok ban: What’ll happen to Chinese apps on your phone?

Another company with considerable presence is Shunwei Capital with investments in Hungama Digital Media Entertainment, Rapido, Sharechat, City Mall, Marsplay Internet, Oye! Rickshaw, and ZestMoney.

Delhivery with investments from Fosun, MakeMyTrip with investments from CTrip, OYO with Didi Chuxing and China Lodging Group investments, Policybazaar and Quikr with investments from Steadview Capital, Rivigo with SAIF Partners investments are some of the unicorns with Chinese investors. Some of these companies have more than one Chinese investor. For instance, Ant Financial and Shunwei Capital also have investments in Zomato, while Meituan Dianping, Hillhouse Capital and SAIF Partners have investments in Swiggy. SAIF Partners also has investment in Paytm, while Steadview Capital, Sailing Capital and China Eternal Yield International Ltd, China-Eurasian Economic Co-operation Fund have investments in Ola. Steadview Capital has investments in Flipkart and Dream 11, while TR Capital has investments in BigBasket. Foxconn also has investments in Hike along with Tencent.

Also read: No legal framework to ban TikTok! Crackdown on Chinese apps easier said than done

“The single largest Chinese investment in India is the $1.1 billion acquisition of Gland Pharma by Fosun in 2018. This accounts for 17.7 per cent of all Chinese FDI into India, but it is unique. Gateway House identified just five other investments (FDI) by Chinese companies which exceed $100 million. This includes the $300-million investment by MG Motors,” stated the think tank.

Not only investments in companies, straight-up impact is also highly visible. Smartphone manufacturers have a significant presence in the Indian market. According to the think tank, Chinese smartphone makers lead the market with an estimated 72 per cent share with companies such as Xiaomi and Oppo ruling the roost.

Also read: Ban is tougher this time! Not easy for TikTok to make a comeback

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