Before the rise of the Internet market in India, American companies were successful in the world except China; Chinese companies can be successful in China, but internationalization has not been very smooth. Now, the Internet giants in China and the United States are going to compete in India.
So, how does the Chinese Internet giant layout the India market? We may as well take a look at the Tencent example, India local well-known media LiveMint interviewed a number of closely related business with Tencent in India, to reveal the layout of Tencent in India internet.
Here's the LiveMint article:
Bangalore reported that in April this year, Tencent invested $700 million in, the highest valuation Internet Co in India. This also represents the Tencent to India high-speed development of the Internet and investment ecology released a signal, that is, the Chinese Internet giants to come true.
Through this financing, Flipcart got $1 billion 400 million, in addition to Tencent, other funds mainly from eBay andMicrosoft. This is a landmark for the Tencent and for India.
Over the past 20 years, Tencent has dominated China's Internet economy. More than 2/3 of the population in China are using Tencent's communications applications WeChat and QQ.
In fact, Tencent has so many users that it can compete with WhatsApp, the world's largest communications application: in China, more than 1 billion people use WeChat every day. (editor's note: the data here is exaggerated.)
But despite the Tencent's 20 years of growth as China's largest Internet Co, the giant is still facing severe challenges.
First of all, China's domestic Internet market growth has reached a critical point, and then there is not much room for large-scale growth.
Second, even if there are billions of users, Tencent doesn't achieve the same kind of achievement as WhatsApp, that is, it has a truly internationalized user base.
The Tencent was aware of the problem and had billions of dollars in it, so he turned to India. This is the Tencent investment in India's most valuable two Internet Co - electronic business platform Flipkart and network about car company Ola - the significance of the significance.
In the venture capital circle of India, Tencent has become one of the most influential and most concerned companies. In the Tencent camp, it also includes Flipkart's first major investment Tiger Fund, and Japan's Softbank group.
What's more interesting is that this series of investments by Tencent makes it another direct competitor of China's Internet giant Alibaba in India. Alibaba also has a lot of investment in India, including the largest digital payment company Paytm in India.
For Tencent and Alibaba, India is naturally one of the most important markets outside of china. With the maturity of China's Internet market, Tencent and Alibaba will have to enter the new market if they want to maintain the growth rate to maintain the stock price.
Moreover, according to two people familiar with the Tencent's investment plans for India sources, considering that India is the only country in the world has a huge and the Internet developed, Tencent planned for the next three years in Tencent invested billions.
Although the Internet market in India is only one in ten of China, there are a large number of potential users in India. This is the most important indicator for the Internet business.
So far, Tencent has invested $1 billion 500 million in the India Internet market, including $700 million invested in Flipkart. The Tencent's first investment in India was in 2015, when it invested $90 million to invest in a digital health platform, Practo Technologies. In addition, Tencent has also invested in India communications application Hike.
India's largest network about the car company Ola announced in early October to get a $1 billion 100 million round of investment, investors including the Tencent and the Softbank group.
Ola says it's also discussing the next $1 billion financing with existing investors and new investors, so the overall financing could be $2 billion.
"The services provided by Ola are very consistent with the travel habits of the local people in India. Our strategic partnership with Ola enables Tencent to become part of India's fast growing online car market. We hope to help Ola better solve the travel problems in India. Tencent President Liu Chiping said.
Ola announced in early October received a $1 billion 100 million investment, the Tencent involved
Tencent is now playing an important role in four areas: electricity providers, digital health, Internet vehicles and communications. It also plans to go into more fields.
Two executives who didn't want to be named said Tencent and India online insurance company Policybazaar talked about shares. But these talks did not ultimately contribute to the investment.
As of this year, Tencent has not slowed down its pace in investing in India.
However, Tencent did not reply to MintAsia's inquiry mail.
Tencent first opened the India office in 2014, and plans to promote its communications applications in India, WeChat. But Facebook's WhatsApp soon became the most popular communication application in India, and did not leave too many opportunities for WeChat.
In 2016, the Tencent shifted the focus of India's office to investment.
Tencent now has a market capitalization of $400 billion, which is one of the two most valuable Internet Co in China (the other is Alibaba). Both companies are based on worldwide influence.
According to Tencent's earnings, in 2016, Tencent's revenue was $22 billion, and its profit was $6 billion.
Most of the India or U.S. companies, Tencent platform they are unprecedented: the core business of the Tencent is WeChat and QQ, which are two games, shopping, social and even pay a one-stop platform.
Tencent believes that India is 5-10 years behind china. It believes that India's position in the Internet market will be similar to China, so it is willing to bet as soon as possible. In the next two years, Tencent will not only invest in India, but will participate in the operation of some companies. Tencent will support those promising India companies, and will also increase the proportion of shares." One of the people mentioned above said.
The competition between Tencent and Alibaba in India is also the continuation of their competition in the Internet in china.
This kind of competition is also reminiscentAmazonEBay and around 2000 in the United States the domestic and international market competition.
Tencent's investment in India is closely related to the two companies: Naspers and softbank.
Naspers holds a large share of Flipkart, and shares in the food ordering platform Swiggy and the online travel website MakeMyTrip. At the same time, it is the largest shareholder of Tencent. Naspers plays an important role in Tencent's investment in Flipkart.
In China and other markets, Tencent and Softbank also have a lot of cooperation. What's interesting is that Softbank is the largest shareholder of Alibaba.
"Tencent are very likely to choose the timing of the investment, and they tend to enter the D round or later. A few years ago, the early Vc firm failed, but later investment a lot. At that time, there were a lot of venture capitalists who invested in later stage. But now it's the opposite. Tencent can make good use of their advantages in the late investment, because the industry in the late stage of the company is not much." A Vc firm partner with joint investment in India and Tencent said. He asked for anonymity.
Then he said: "although the Tencent's investment in India is long, but do not rush to repay investors Limited (LP), but when they use the strategy of investment in India is still the same and ordinary Vc firm. For now, they are very satisfied with the strategic investment of Flipkart and Ola, and in the next few years, they may combine Naspers to buy one of them. They are really optimistic about the India market, and the long-term goal."
Flipkart is India's largest electricity supplier company, Tencent has become an important shareholder
Tencent is a listed company in Hongkong, and they already have many services such as media, entertainment and electronic business in china. Now, the challenge they face is to replicate the success in China to India.
The Tencent balance sheet has tens of billions of dollars to use. Moreover, China's Internet development has slowed down, so Tencent must ensure that they will not miss the India market. They believe that the world's last huge Internet market has not yet been developed in India." One of the interviewees said.
In order to make sure that you don't miss India, Tencent has done a lot to make it possible for you to have a place in India's top Internet Co.
It's already the most active overseas investor in India startups. The company, headquartered in Shenzhen, China, has invested a lot in India, including Practo and Hike.
According to the 5 executives interviewed earlier, Tencent executives have gone to India many times in the past 18 months, and they have seen all kinds of India entrepreneurs and investors.
Executives who record Tencent's actions in India feel that, even with the Naspers, it is not easy for Tencent to win a combination of Alibaba and Softbank in India.
In the past 18-24 months, Alibaba and Softbank have become more and more closely integrated, especially after they invest in Paytm.
Tencent is not necessarily the best time to enter India, because now the Internet economy in India is experiencing a downturn, the Internet business is not as active as before.
The number of new startups in India has declined sharply for two consecutive years, according to data from Tracxn, a data company that tracks start-ups.
But even so, it's hard to get the Tencent to retreat.
The five executives interviewed said that the Tencent will spare no effort for himself to get the upper hand in India.
"They hold billions of dollars. Like Amazon, even if they plan to spend 5 billion dollars on the India market in the next 2-3 years, it's not a huge amount of money for them." A senior executive interviewed said.