March 17, 2018. Shanghai – High growth entrepreneurship and innovation was the focus of discussions at the 6^th China-India Cooperation Forum held today at the Shanghai Campus of China Europe International Business School (CEIBS). Panel discussions featured seven CEOs of Indian high-growth ventures that have raised between US$ 4.5 and US$ 100 million in funding from the most reputed financial and strategic investors.

Chinese investment into India reached US$ 1 billion in the first two months of 2018, on the back of US$ 5.2 billion in 2017. CEIBS Chengwei Ventures Chair Professor of Entrepreneurship S. Ramakrishna Velamuri, who convened the forum, noted that while the average GDP growth rate of 7.1% over the 20-year period 1997-2017 has attracted the attention of global investors and corporations to India, there are many additional reasons why Chinese companies – in particular – see India as a very promising future market.

“India is the only country in the world that offers Chinese companies a market similar in size to their domestic market,” he said. “In addition, while US companies have established significant leadership positions in India in multiple technology verticals such as search (Google) and social media (Facebook, WhatsApp), there are others such as ecommerce and mobile payments where there still exist opportunities for the Chinese giants.”

Prof. Velamuri also noted that the major reforms implemented in India in 2017, such as demonetization, the introduction of the Goods and Services Tax and the recapitalization of banks, could lead to an acceleration of economic growth. Though Indian consumers’ ability to pay is currently lower than their counterparts in China, the economic growth trajectory suggests that the situation will steadily improve in the coming years, he said.

The panel discussions at the forum highlighted how China and India have followed very different strategies in growing their entrepreneurial ecosystems. Whereas China has created a number of national champions in most technology areas, such as Baidu, Alibaba, Tencent, JD.com, Meituan-Dianping, and Ctrip (now rebranded Trip), India has allowed the American giants such as Google, Amazon and Facebook to have a dominant presence. Though China has certainly created technology giants to rival the US ones, with a couple of them valued at over US$ 500 billion, the Indian technology companies seem to be more interconnected with the global entrepreneurial ecosystem.

Capillary Technologies CEO Aneesh Reddy touched upon a related point, telling the audience that he is driven by a desire to see the creation of a large software company in Asia. He was speaking during a panel on Indian entrepreneurial ventures that are focused on the global market, a segment that has not yet attracted the attention of Chinese strategic investors. Capillary, which harnesses tech to help businesses enhance their customer relationship management, works with 300 brands that it serves with 700 employees located in 10 offices in countries around the globe. The company has already attracted US$ 100 million in funding. Reddy provided key lessons for building a business focused on India as well as tips on building a global business out of the country. “India’s a very forgiving market, you can make a few mistakes and people are fine with it,” he said. “But there is strong competition from MNCs. India is not a walled garden, there’s a lot of competition for business and talent.”

One company that seems to have found a way to differentiate itself is Amagi Technologies. Considered India’s leader in cloud-managed broadcast services and targeted advertising for TV and the internet, Amagi has US$ 50 million of funding and 250 employees in 40 countries. According to CEO Baskar Subramanian, they began by focusing on targeted ads as a way to more effectively reach clients, and have now advanced to being able to have different ads seen by people watching the same program (based on viewers’ location, preferences and other criteria). Their next step: to offer this geo-targeting service at the global level.

The panel, moderated by WeCan Capital and Accelerator Network Chairman Brent Li, was rounded out by presentations with a heavy tech focus. Mettl CEO Ketan Kapoor explained how his company, one of the largest and fastest growing online talent measurement firms globally, uses tech to help its clients build winning teams. Mettl has more than 300 employees around the world and has attracted about US$ 4.5 million in funding so far. It has partners in 31 countries and its tools are being used in 80 countries. Tata Technologies’ Peter Dow spoke about how the auto-tech company, which has 8,500 employees globally and more than US$ 418 million in revenue, is harnessing cutting edge technology to partner with companies in its target market. He explained that they had grown from two employees in China in 2014 to 200 today, and their success was based on having a very clear strategy. “We focused initially only on Shanghai, and only on the auto industry. We have targeted what we have tried to do here because it’s such a big market,” he said. For companies interested in having China operations as part of their global strategy, Dow said, the ability to act quickly would be a huge asset. “If you’re going to work in China, you have to be fast,” he advised.

There was also a panel discussion about Indian ventures that are focused on the domestic market. The moderator was Richard Thoman, Managing Partner, Corporate Perspectives and former CEO of Xerox Corporation. Among the speakers was FundsIndia CEO Srikanth Meenakshi, who provided valuable insight into India’s fintech industry, based on his company’s operations so far. FundsIndia is the country’s leading online investment platform, with 1.1 million customers in more than 2,000 cities and towns, and more than US$ 780 million invested. “We were India’s first online-only platform and we’ve found that the concept works. People are willing to do transactions online without any physical connection,” he said. “But customers still need individual attention and personal solutions. They want to be engaged, they prefer talking to another human being. And we also learned that a lot of patience is needed to cultivate the market.”

Also joining the panel was R. Narayan, CEO of Power2sme, which addresses a US$ 150 billion market by helping India’s SMEs in the manufacturing sector level the playing field when competing with larger firms – for example it helps them access funding at competitive rates and get the best prices when sourcing raw material, such as steel, polymers and chemicals. The discussions were rounded out by Ankur Warikoo, CEO of Nearbuy, India’s largest O2O company. According to Warikoo, their focus is on lifestyle services at the retail level; and while they are using China as a case study everything they do is grounded in a solid understanding of their local market. “India is a time rich, cash poor country. We help our customers save money and we help our merchants sell online,” he said. With many merchants in India a lot less internet savvy than in other parts of the world, Nearbuy offers strong support including using algorithms to suggest optimal pricing. The company has 8 million downloads of its apps, impressive for India but modest when compared to China. It has raised US$ 34 million to date from investors including Alibaba’s Paytm, Sequoia Capital and Groupon.

Among the mix of experienced Chinese entrepreneurs, potential partners and investors at today’s event was Ms. Vani Kola, Managing Partner of Kalaari Capital. One of the most experienced early-stage investors in India, she spoke with Prof. Velamuri about investment opportunities in the Indian entrepreneurial ecosystem. She said that foreign investors (limited partners) who invest in India-based funds have no difficulty in repatriating their profits from India, and that the taxation rate on capital gains is 15%.

His Excellency Anil Kumar Rai, Consul General of India in Shanghai, and President of Tata Sons China Mr. James Zhan were among the keynote speakers while CEIBS Vice President and Co-Dean Professor Zhang Weijiong gave the opening address. The day’s event ended with a networking session where participants continued the discussions touched upon earlier in the day.

The forum was organized by CEIBS together with the Consulate General of India in Shanghai and the Tata Group, with support from the Confederation of Indian Industry.