The last week was incredible in terms of the growth of India's technology companies, as a record round of funding moved focus to the world's second-largest market at a time when investors were concerned about China's crackdown on tech firms.
While the food delivery app Zomato with funding from Morgan Stanley, Tiger Global and Fidelity Investments, became the country's first unicorn to go public, raising $1.3 billion, Paytm submitted a draught prospectus for a $2.2 billion IPO, which might be India's largest and Flipkart Online Services Pvt received $3.6 billion at a $38 billion valuation.
According to Hans Tung, the Silicon Valley-based managing partner of GGV Capital, for the past several years, Indian entrepreneurs have been quietly establishing start-ups, the country's internet infrastructure has dramatically improved, and there is a strong global desire for IT stocks. Hans said that "investors are beginning to see the huge upside and they expect India to be a China," reported the South China Morning Post.
In contrast to China, where online usage is far more advanced, many of India's 625 million internet users are getting started to experience the world of video streaming, social networking, and e-commerce. Since e-commerce accounts for less than 3 per cent of retail transactions, the possibilities in online buying are extremely appealing. Even a London-based data and analytics firm GlobalData has predicted that India's e-commerce market will reach $120 billion by 2025.
But in China, the authorities are reigning in its internet companies, slashing market values by over $800 billion since February's peak and decreasing the net wealth of its most prominent entrepreneurs by billions. The Cyberspace Administration Of China abruptly removed Didi Global from app stores earlier this month. This move came months after regulators pushed Chinese business mogul Jack Ma's Ant Group to cancel a spectacular IPO at the last minute.
The crackdown is expected to continue as officials attempt to rein in tech corporations' dominance. It is vital to remember that Chinese tech businesses operate in a country where the government is becoming increasingly dictatorial, demanding absolute fealty from the private sector. The more important fact is that under cover of antitrust, China is cementing the Communist Party's monopoly of power, with private businesses losing what little independence they have left and becoming a kind of additional arm of the state.
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