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India-China collaboration: a ‘smart’ South Asian tech connection

Tao Li
17th Apr 2019
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Due to the similarity of the markets, the solutions developed by Chinese entrepreneurs are more suited to India rather than the one-size-fits-all strategies that you get from the majority of US technology giants.

India has over two-thirds of its population under the age of 35 years and is likely to have the world’s largest workforce by the year 2027. This workforce will constitute approximately a billion people aged between 15 and 64 years, of which 390 million are millennials, and about 440 million are in the Gen-Z cohort, according to a recent study by consulting firm Deloitte. With around 12 million people being added to the working age population every year, the demographic profile will completely change the face of its economy.


In China, the generation that is in its 50s today is responsible for lifting the nation out of poverty and into the middle-income status. And for India, the millennials will potentially give India the impetus to emerge as the next economic superpower.


China’s technology journey

China's internet industry began in the late 90s, initially led by the US internet giants such as Yahoo. Soon, local companies also started proliferating. Over the last few decades, the Internet expanded rapidly within China. According to the latest report by China Internet Network Information Centre(CINIC), an administrative agency that falls under Chinese Ministry of Information Industry, the number of Chinese internet users reached the 800-million-mark last year, making it the largest Internet industry in the world. Interestingly, more than 70 percent of Chinese netizens uses the internet for two key segments: shopping, and entertainment. China's domestic internet giants are having a huge impact on China's economy.


India’s technology Journey

The advent of technology in India began with the IT boom in the 1980s-1990s when Wipro, Infosys, NIIT, Mastek, and other domestic companies started operations. Indian technology has evolved significantly since then, growing to add cloud-based transactions, artificial intelligence (AI), internet of things (IoT), big data analytics, augmented reality (AR), and virtual reality (VR), as well as blockchain to India’s technology expertise. India is also starting to put in place robust broadband infrastructure.


In recent years, India has also seen a colossal growth in Internet penetration, mainly due to smartphones. The demand for inexpensive connectivity makes India the preferred market for Chinese smartphone manufacturing companies. Collaboration between telecom companies, smartphone makers/OEMs, makers of mobile operating systems, and advertisers from varied sectors has helped in creating a conducive environment for the overall growth of mobile-first, internet-enabled technology businesses–a trend noticed in China as well.


In India, the market is predominantly Android-driven with little diversity in mobile operating systems, which creates a unique opportunity for Chinese players.

Commonly referred to as the ‘World Factory’, China is a manufacturing giant, with decades of experience in the technology market, making it a valuable partner for India.

Xiaomi, Huawei, Oppo, and other Chinese smartphone makers—all operating manufacturing plants in India—have already had great success in the Indian market with Xiaomi's sales growing by a whopping 259 percent in 2017.


The India-China partnership

Here are the reasons a partnership between the two countries makes sense:

  1. India’s technological expertise and large talent pool ensure access to convenient, affordable, innovative technology at the grassroots level.
  2. The access to technology combined with India’s new business-friendly policies and concepts of ‘agility’, ‘flexibility’, and ‘change adaptability’ is gaining popularity.
  3. The country is predicted to have the largest start-up ecosystem in the world by the year 2035.
  4. Over the past three calendar years, Chinese and Chinese-origin investors have poured in about $3.7 billion (₹23,600 crore) into Indian start-ups, according to data sourced from VCCEdge and Tracxn.
  5. The investment has come as a boon for many startups that have had trouble getting funding from domestic sources.


Although both nations are viewed as competitors in the global market, the current breed of Chinese giants sees India as ‘the next China’. The partnership is beneficial for both countries as they have complementary strengths.


What Chinese internet companies can teach India

Most industry experts opine that an emerging market like India should learn from Chinese internet companies rather than its US counterparts purely because of their similarities. Many argue that the challenges and problems that most consumers have in Southeast Asia and South Asia, including India, are very similar to the ones faced by China.


Therefore, the solutions developed by Chinese entrepreneurs are more suited to these markets rather than the one-size-fits-all strategies that you get from the majority of the US technology giants. Chinese players also understand Indian consumers better, and it could prove to be a win-win situation for both nations.


(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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