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India’s food tech sector to touch $8 billion by 2022
Consumer appetite for food ordering is set to rise with India’s online food ordering market expected to grow at a compound annual growth rate of 25-30% to touch $7.5- $8 billion by 2022, up from $4 billion, according to a report by Google and Boston Consulting Group (BCG).
Increased reach of internet in India’s smallest cities will help consumers discover new platforms, even as online food companies expand their reach to more cities and rope in more restaurants, prompting users of apps to spend more time and money on them.
“Overall online spending in India is rising rapidly and expected to grow at 25% over the next five years to reach over $130 billion," said Rachit Mathur, managing director and partner, India lead, consumer and retail practice, BCG. The reach of food tech firms has grown six times over the last couple of years on the back of rapid digitization and steadily growing consumption and will continue to increase, he said.
Between 2017 to 2019, the reach of food tech aggregators grew six times.
The time spent exploring and ordering food online has also nearly doubled from 32 minutes in 2017 to 72 minutes per month in 2019.
The report also expects ordering frequency to grow by 18-20%, though average order values may soften by 5-10% as consumers try small portions but order more. “Higher order frequency though offset by lower average order value," the report said.
India’s food tech sector to touch $8 billion by 2022
Consumer appetite for food ordering is set to rise with India’s online food ordering market expected to grow at a compound annual growth rate of 25-30% to touch $7.5- $8 billion by 2022, up from $4 billion, according to a report by Google and Boston Consulting Group (BCG).
Increased reach of internet in India’s smallest cities will help consumers discover new platforms, even as online food companies expand their reach to more cities and rope in more restaurants, prompting users of apps to spend more time and money on them.
“Overall online spending in India is rising rapidly and expected to grow at 25% over the next five years to reach over $130 billion," said Rachit Mathur, managing director and partner, India lead, consumer and retail practice, BCG. The reach of food tech firms has grown six times over the last couple of years on the back of rapid digitization and steadily growing consumption and will continue to increase, he said.
Between 2017 to 2019, the reach of food tech aggregators grew six times.
The time spent exploring and ordering food online has also nearly doubled from 32 minutes in 2017 to 72 minutes per month in 2019.
The report also expects ordering frequency to grow by 18-20%, though average order values may soften by 5-10% as consumers try small portions but order more. “Higher order frequency though offset by lower average order value," the report said.
India’s food tech sector to touch $8 billion by 2022
Unfinished apartments tell stories of India’s economic slump, banking system stress and nervous consumers
The real estate market illustrates the extent of the economy’s woes. Property developers like Wish Town’s Jaypee Infratech Ltd. have gone bust, are mired in billions of dollars of debt and unable to secure funding to complete projects as promised.
X
Wish Town’s failure tells the story of an economy in distress, a banking system in pain and consumers too worried about job cuts and rising costs to spend. (Representational picture)
Wish Town was once a sought-after destination for India’s aspiring middle classes seeking a slice of the “good days” promised by an ambitious Prime Minister Narendra Modi when he swept to power more than five years ago. Now, it’s a symbol of lost hope. A sprawling 1,063-acre property development located in Noida, just outside New Delhi, Wish Town was supposed to give would-be home buyers sparkling shopping malls, pristine golf courses and modern medical clinics. Apartments that should have been delivered by 2012 were billed in the media as “global homes with an Indian address.”
Today the area is dotted with unfinished apartment blocks, abandoned part way through construction. Dilapidated buildings stand vacant, with overgrown bushes instead of manicured lawns. Most of the streets are empty of cars and people, aside from a few security guards.
Wish Town’s failure tells the story of an economy in distress, a banking system in pain and consumers too worried about job cuts and rising costs to spend. India’s slumping consumption is so severe that it’s denting global growth and prompting economists including last year’s Nobel prize winner Abhijit Banerjee to warn of a “major recession” in the country.
The real estate market illustrates the extent of the economy’s woes. Property developers like Wish Town’s Jaypee Infratech Ltd. have gone bust, are mired in billions of dollars of debt and unable to secure funding to complete projects as promised. Non-bank financing, a $335 billion industry that became the lifeline for millions of small businesses and consumers in recent years, has dried up. Prospective home buyers are paying mortgages for apartments they can’t live in, putting their budgets under strain. And millions of construction jobs are at risk, with effects that are already rippling across India’s all-important rural economy.
From 8% growth three years ago, the economy is set to expand just 5% in the fiscal year through March, the weakest performance since 2009. The International Monetary Fund last week slashed India’s growth forecast for this year by 1.2 percentage points to 5.8%, specifically citing the nation as a reason for cutting its global growth outlook.
Despite tentative signs that the worst may be over, growth isn’t set to reach its previous highs anytime soon, never mind the 9%-10% pace the economy needs to combat extreme poverty in a nation of 1.3 billion people. Modi’s goal of almost doubling the size of the economy to $5 trillion is becoming more distant and his 2014 promise that “good days are coming” no longer rings true.
To make matters worse for Modi, he’s dealing with the biggest social upheaval since he came to power. Thousands of students and people from neighborhood groups have joined forces countrywide to protest a controversial citizenship law that critics say discriminates against Muslims and undermines India’s secular roots. The fallout has dented Modi’s image abroad and given some investors reason to rethink the ‘India Rising’ narrative.
At the heart of the economy’s problems is a lingering credit slowdown, made worse by a crisis in the shadow banking industry nearly two years ago following the default by one of the nation’s biggest infrastructure lenders. Shadow banks — lenders outside the regular financial system that aren’t as tightly regulated as deposit-taking banks — had been responsible for millions of small loans on everything from cars to gold jewelry to luxury apartments over the years. The shock default caused credit markets to seize up in what some have called India’s Lehman moment, a reference to the 2008 collapse of the Wall Street investment bank that triggered the global financial crisis.
As lenders choked off credit, domestic spending took a knock — and with consumption making up almost two-thirds of India’s gross domestic product, it wasn’t too long before growth numbers were hit. In Wish Town, aspiring home buyers are curbing spending as they wait for construction to proceed.
Sherry Addvant, 39, public relations executive
She forks out 25,000 rupees ($350) a month to rent an apartment while still paying off a mortgage of 80,000 rupees for a home in Wish Town that hasn’t been built six years after she made the purchase.
“I was expecting my first child when we bought this property. Now I have delivered another one, but the house is nowhere in sight,” Addvant said from the balcony of her rented apartment, overlooking the half-built shell that was supposed to be her new home. She’s cut back on shopping and traveling, and doesn’t plan to replace her decade-old car.
A 10-minute drive from Addvant’s home in Wish Town brings you to a bustling intersection of hole-in-the-wall shops and street food carts, where about 1,000 laborers gather each morning in search of construction work that will pay less than $6 a day. Many are dressed in caps and sweaters not warm enough for New Delhi’s plummeting winter temperatures this year of as low as 3 degrees Celsius. The workers stand for hours along the sidewalk hoping to get picked up by builders who need the extra hands that day.
Suraj Kumar, 25, construction worker
“Earlier, everyone would get work for about 25 days in a month, but now even five to 10 days is a lot,” said Kumar, who migrated to India’s capital from the eastern state of Bihar.
To feed his two-month-old baby and already reeling from paying off loans from his relatives, Kumar has taken a job as a night security guard. He’s replaced breakfast with just a cup of tea and eats bread and salt instead of full meals. He hasn’t bought clothes in a long time, has sold his wife’s jewelry to make ends meet and looks for additional work during the day to survive.
The links between the construction industry and rural incomes are strong, which explains why consumption has been so badly affected, according to Pranjul Bhandari, chief India economist at HSBC Holdings Plc in Mumbai. About two-thirds of India’s population live in rural areas and with limited incomes, many villagers flock to cities to find work and send money home to their families. Bhandari estimates 70% of rural people draw their income from activity outside of farming, especially in construction.
“Rural income depends on construction, and construction depends on shadow banks by more than meets the eye,” she said.
Having secured a bigger mandate in last year’s election, Modi is now confronted with rising unemployment as layoffs spread across industries from automakers to jewelers. The jobless rate — which the most recent official data puts at a four-decade high of 6.1% in June 2018 — probably climbed to 7.85% in the final three months of last year, according to the Centre for Monitoring Indian Economy.
Parth Mehta, managing director at Paradigm Realty, a Mumbai-based mid-size builder, said the company is scaling back on employment as the number of projects fell.
“The blood in the finance system has got completely choked and capital is difficult to come by,” he said. “Lack of confidence, whether among buyers, developers and in general among corporates, is one of the key reasons for the intensifying slowdown. The shadow banking crisis was the final nail in the coffin.”
The government’s response to the slowdown so far has been focused on boosting production in the economy, rather than stimulating demand. Finance Minister Nirmala Sitharaman gave companies $20 billion worth of tax cuts last year, set up a 250 billion-rupee fund to salvage stalled residential projects, merged weak state-run banks with stronger ones and eased foreign investment rules.
She’s expected to outline more measures in her budget speech on Feb. 1, with market watchers calling for increased spending in rural areas and tax cuts. A significant fiscal stimulus is unlikely though, given a slump in government revenue and a likely breach of this year’s deficit target of 3.3% of GDP.
What Bloomberg’s Economists Say
“We believe that a coordinated fiscal and monetary boost is needed to lift the economy out of its current growth slump. In our view, tax cuts aimed at spurring private consumption and a boost in public capital expenditure would increase capacity utilization, avoiding any crowding out of private-sector firms.” — Abhishek Gupta, India economist.
There’s not much scope for Shaktikanta Das, governor of the Reserve Bank of India, to keep cutting interest rates too. Inflation exceeds 7%, well above the bank’s 2%-6% target, and given the credit problems in the financial system, the RBI’s five rate cuts last year have done little to spur lending. Economists in a Bloomberg survey see 25 basis points of easing for the rest of this year.
Rajesh Sharma, managing director of Capri Global Capital Ltd., a non-bank lender in Mumbai
“Lending to the real estate in India is still considered a nightmare by investors because of problems including the inability of many developers to finish projects and the demand slowdown,” he said. “Funding for real estate has dried up. While it was a little difficult for the developers to get money before the shadow banking crisis, now it’s very, very difficult.”
Back in Wish Town, a state-owned company has been selected to complete construction of the outstanding apartments over the next four years. But home buyers like Manish Choudhary, a senior executive with an information technology company, remain bitter about their circumstances.
“We can’t plan vacation and buy even normal stuff. I would have sent my child to a better school if the mortgage and rent wasn’t there,” said Choudhary. “The slowdown has hit the class which is paying taxes.”
Unfinished apartments tell stories of India’s economic slump, banking system stress and nervous consumers
The real estate market illustrates the extent of the economy’s woes. Property developers like Wish Town’s Jaypee Infratech Ltd. have gone bust, are mired in billions of dollars of debt and unable to secure funding to complete projects as promised.
X
Wish Town’s failure tells the story of an economy in distress, a banking system in pain and consumers too worried about job cuts and rising costs to spend. (Representational picture)
Wish Town was once a sought-after destination for India’s aspiring middle classes seeking a slice of the “good days” promised by an ambitious Prime Minister Narendra Modi when he swept to power more than five years ago. Now, it’s a symbol of lost hope. A sprawling 1,063-acre property development located in Noida, just outside New Delhi, Wish Town was supposed to give would-be home buyers sparkling shopping malls, pristine golf courses and modern medical clinics. Apartments that should have been delivered by 2012 were billed in the media as “global homes with an Indian address.”
Today the area is dotted with unfinished apartment blocks, abandoned part way through construction. Dilapidated buildings stand vacant, with overgrown bushes instead of manicured lawns. Most of the streets are empty of cars and people, aside from a few security guards.
Wish Town’s failure tells the story of an economy in distress, a banking system in pain and consumers too worried about job cuts and rising costs to spend. India’s slumping consumption is so severe that it’s denting global growth and prompting economists including last year’s Nobel prize winner Abhijit Banerjee to warn of a “major recession” in the country.
The real estate market illustrates the extent of the economy’s woes. Property developers like Wish Town’s Jaypee Infratech Ltd. have gone bust, are mired in billions of dollars of debt and unable to secure funding to complete projects as promised. Non-bank financing, a $335 billion industry that became the lifeline for millions of small businesses and consumers in recent years, has dried up. Prospective home buyers are paying mortgages for apartments they can’t live in, putting their budgets under strain. And millions of construction jobs are at risk, with effects that are already rippling across India’s all-important rural economy.
From 8% growth three years ago, the economy is set to expand just 5% in the fiscal year through March, the weakest performance since 2009. The International Monetary Fund last week slashed India’s growth forecast for this year by 1.2 percentage points to 5.8%, specifically citing the nation as a reason for cutting its global growth outlook.
Despite tentative signs that the worst may be over, growth isn’t set to reach its previous highs anytime soon, never mind the 9%-10% pace the economy needs to combat extreme poverty in a nation of 1.3 billion people. Modi’s goal of almost doubling the size of the economy to $5 trillion is becoming more distant and his 2014 promise that “good days are coming” no longer rings true.
To make matters worse for Modi, he’s dealing with the biggest social upheaval since he came to power. Thousands of students and people from neighborhood groups have joined forces countrywide to protest a controversial citizenship law that critics say discriminates against Muslims and undermines India’s secular roots. The fallout has dented Modi’s image abroad and given some investors reason to rethink the ‘India Rising’ narrative.
At the heart of the economy’s problems is a lingering credit slowdown, made worse by a crisis in the shadow banking industry nearly two years ago following the default by one of the nation’s biggest infrastructure lenders. Shadow banks — lenders outside the regular financial system that aren’t as tightly regulated as deposit-taking banks — had been responsible for millions of small loans on everything from cars to gold jewelry to luxury apartments over the years. The shock default caused credit markets to seize up in what some have called India’s Lehman moment, a reference to the 2008 collapse of the Wall Street investment bank that triggered the global financial crisis.
As lenders choked off credit, domestic spending took a knock — and with consumption making up almost two-thirds of India’s gross domestic product, it wasn’t too long before growth numbers were hit. In Wish Town, aspiring home buyers are curbing spending as they wait for construction to proceed.
Sherry Addvant, 39, public relations executive
She forks out 25,000 rupees ($350) a month to rent an apartment while still paying off a mortgage of 80,000 rupees for a home in Wish Town that hasn’t been built six years after she made the purchase.
“I was expecting my first child when we bought this property. Now I have delivered another one, but the house is nowhere in sight,” Addvant said from the balcony of her rented apartment, overlooking the half-built shell that was supposed to be her new home. She’s cut back on shopping and traveling, and doesn’t plan to replace her decade-old car.
A 10-minute drive from Addvant’s home in Wish Town brings you to a bustling intersection of hole-in-the-wall shops and street food carts, where about 1,000 laborers gather each morning in search of construction work that will pay less than $6 a day. Many are dressed in caps and sweaters not warm enough for New Delhi’s plummeting winter temperatures this year of as low as 3 degrees Celsius. The workers stand for hours along the sidewalk hoping to get picked up by builders who need the extra hands that day.
Suraj Kumar, 25, construction worker
“Earlier, everyone would get work for about 25 days in a month, but now even five to 10 days is a lot,” said Kumar, who migrated to India’s capital from the eastern state of Bihar.
To feed his two-month-old baby and already reeling from paying off loans from his relatives, Kumar has taken a job as a night security guard. He’s replaced breakfast with just a cup of tea and eats bread and salt instead of full meals. He hasn’t bought clothes in a long time, has sold his wife’s jewelry to make ends meet and looks for additional work during the day to survive.
The links between the construction industry and rural incomes are strong, which explains why consumption has been so badly affected, according to Pranjul Bhandari, chief India economist at HSBC Holdings Plc in Mumbai. About two-thirds of India’s population live in rural areas and with limited incomes, many villagers flock to cities to find work and send money home to their families. Bhandari estimates 70% of rural people draw their income from activity outside of farming, especially in construction.
“Rural income depends on construction, and construction depends on shadow banks by more than meets the eye,” she said.
Having secured a bigger mandate in last year’s election, Modi is now confronted with rising unemployment as layoffs spread across industries from automakers to jewelers. The jobless rate — which the most recent official data puts at a four-decade high of 6.1% in June 2018 — probably climbed to 7.85% in the final three months of last year, according to the Centre for Monitoring Indian Economy.
Parth Mehta, managing director at Paradigm Realty, a Mumbai-based mid-size builder, said the company is scaling back on employment as the number of projects fell.
“The blood in the finance system has got completely choked and capital is difficult to come by,” he said. “Lack of confidence, whether among buyers, developers and in general among corporates, is one of the key reasons for the intensifying slowdown. The shadow banking crisis was the final nail in the coffin.”
The government’s response to the slowdown so far has been focused on boosting production in the economy, rather than stimulating demand. Finance Minister Nirmala Sitharaman gave companies $20 billion worth of tax cuts last year, set up a 250 billion-rupee fund to salvage stalled residential projects, merged weak state-run banks with stronger ones and eased foreign investment rules.
She’s expected to outline more measures in her budget speech on Feb. 1, with market watchers calling for increased spending in rural areas and tax cuts. A significant fiscal stimulus is unlikely though, given a slump in government revenue and a likely breach of this year’s deficit target of 3.3% of GDP.
What Bloomberg’s Economists Say
“We believe that a coordinated fiscal and monetary boost is needed to lift the economy out of its current growth slump. In our view, tax cuts aimed at spurring private consumption and a boost in public capital expenditure would increase capacity utilization, avoiding any crowding out of private-sector firms.” — Abhishek Gupta, India economist.
There’s not much scope for Shaktikanta Das, governor of the Reserve Bank of India, to keep cutting interest rates too. Inflation exceeds 7%, well above the bank’s 2%-6% target, and given the credit problems in the financial system, the RBI’s five rate cuts last year have done little to spur lending. Economists in a Bloomberg survey see 25 basis points of easing for the rest of this year.
Rajesh Sharma, managing director of Capri Global Capital Ltd., a non-bank lender in Mumbai
“Lending to the real estate in India is still considered a nightmare by investors because of problems including the inability of many developers to finish projects and the demand slowdown,” he said. “Funding for real estate has dried up. While it was a little difficult for the developers to get money before the shadow banking crisis, now it’s very, very difficult.”
Back in Wish Town, a state-owned company has been selected to complete construction of the outstanding apartments over the next four years. But home buyers like Manish Choudhary, a senior executive with an information technology company, remain bitter about their circumstances.
“We can’t plan vacation and buy even normal stuff. I would have sent my child to a better school if the mortgage and rent wasn’t there,” said Choudhary. “The slowdown has hit the class which is paying taxes.”
Unfinished apartments tell stories of India’s economic slump, banking system stress and nervous consumers
Economic Survey 2020: Temasek-Like Structure Proposed To Speed Up Disinvestment
BQ Desk; Jan 31 2020, 2:04 PM IST
The Economic Survey, released by the Chief Economic Adviser’s office a day ahead of the Union Budget, has proposed a new structure of disinvestment to maximise returns from public sector enterprises.
The survey suggests that the government take a leaf out of Singapore’s Temasek model and transfer its holdings in central public sector enterprises to a separate corporate entity, which would be managed by an independent board. This entity can then continue to divest individual units at appropriate points in time.
The aim of any privatisation or disinvestment programme should be the maximisation of the government’s equity stake value, the Economic Survey for 2019-20 said while proposing the new structure.
-Economic Survey 2019-20
According to data provided by the Economic Survey, there are about 264 CPSEs under 38 different ministries and departments. Of these, 13 ministries have around 10 CPSEs each under its jurisdiction.
Many of these are profitable enterprises but do not generate the kind of returns that private firms do. “CPSEs have generally underperformed the market as is evident from the average return of only 4 percent of BSE CPSE Index against the 38 percent return of BSE SENSEX during the period 2014-2019,” the Survey said.
It added that CPSEs tend to perform better after privatisation.
A comparative analysis of the before-and-after performance of eleven CPSEs, that had undergone strategic disinvestment from 1999-2000 to 2003-04, showed that net worth, net profit, return on assets, return on equity and most other performance indicators improved significantly in the post privatisation period.
The analysis clearly affirms that disinvestment (through the strategic sale) of CPSEs unlocks their potential of these enterprises to create wealth evinced by the improved performance after privatisation, said the survey, while recommending that aggressive disinvestment be pursued.
-Economic Survey 2019-20
Economic Survey 2020: Temasek-Like Structure Proposed To Speed Up Disinvestment
BQ Desk; Jan 31 2020, 2:04 PM IST
The Economic Survey, released by the Chief Economic Adviser’s office a day ahead of the Union Budget, has proposed a new structure of disinvestment to maximise returns from public sector enterprises.
The survey suggests that the government take a leaf out of Singapore’s Temasek model and transfer its holdings in central public sector enterprises to a separate corporate entity, which would be managed by an independent board. This entity can then continue to divest individual units at appropriate points in time.
The aim of any privatisation or disinvestment programme should be the maximisation of the government’s equity stake value, the Economic Survey for 2019-20 said while proposing the new structure.
The government can transfer its stake in the listed CPSEs to a separate corporate entity. This entity would be managed by an independent board and would be mandated to divest the government stake in these CPSEs over a period of time. This will lend professionalism and autonomy to the disinvestment programme which, in turn, would improve the economic performance of the CPSEs.
According to data provided by the Economic Survey, there are about 264 CPSEs under 38 different ministries and departments. Of these, 13 ministries have around 10 CPSEs each under its jurisdiction.
Many of these are profitable enterprises but do not generate the kind of returns that private firms do. “CPSEs have generally underperformed the market as is evident from the average return of only 4 percent of BSE CPSE Index against the 38 percent return of BSE SENSEX during the period 2014-2019,” the Survey said.
It added that CPSEs tend to perform better after privatisation.
A comparative analysis of the before-and-after performance of eleven CPSEs, that had undergone strategic disinvestment from 1999-2000 to 2003-04, showed that net worth, net profit, return on assets, return on equity and most other performance indicators improved significantly in the post privatisation period.
The analysis clearly affirms that disinvestment (through the strategic sale) of CPSEs unlocks their potential of these enterprises to create wealth evinced by the improved performance after privatisation, said the survey, while recommending that aggressive disinvestment be pursued.
Aggressive disinvestment should be undertaken to bring in higher profitability, promote efficiency, increase competitiveness and to promote professionalism in management in the selected CPSEs for which the Cabinet has given in-principle approval.
Economic Survey 2020: Temasek-Like Structure Proposed To Speed Up Disinvestment
#BUDGET - 2020
NSitharamanOffice (@nsitharamanoffc) Tweeted:
Significant relief to taxpayers. #janjankabudget #Budget2020 NSitharamanOffice on Twitter ( )
THREAD!!
NSitharamanOffice (@nsitharamanoffc) Tweeted:
Significant relief to taxpayers. #janjankabudget #Budget2020 NSitharamanOffice on Twitter ( )
THREAD!!
The entire script still isn't clear. As you must know by now, there's a choice between opting for the new slab or the old one with exemptions. Then there's the issue of exemptions. Apparently 70% of the old exemptions have been scrapped. The list isn't out yet or if it is, I have no access to it.
I know about the two options. But if I chose to go the old way with exemptions, then I do not get any benefit, rather I might end up paying more due to removal of some exemptions. If I opt for new slabs, then total tax benefit is 75k. But then I loose tax benefit from house rent, provident fund, medical, transport etc which is much more than 75k, since they come from 30% slab.
House rent/ home loan, savings in pf/elss/ ppf etc, student loan, medical, transport/ car lease ..
The question is How many people will move to the new scheme
Fin Min was saying that they expect a recenue loss of 40 K crores
And all people are not
Salaried employees availing these deductions and exemptions
Anyway we will see the data after one year
I think this was a lollypop for the middle class after last year' s corporate tax reduction
It's a non existent lollipop with fringe benefits meant to boost consumption.
So it will start conflicts in households
Family members claiming more money
Since IT has been reduced
While Tax payers wondering Whether Fin Min has played a joke on them
Starved of openings, Chinese Cos cross Great Wall to India
Over a dozen new China-domiciled corporations, venture funds and family offices are aggressively stepping up investment conversations with Indian startups as they look to move beyond the slowing market for technology investment in Asia’s largest economy.
The heightened interest in early-to-growth-stage Indian firms coincides with fewer Chinese startups going public, uncertainty caused by the country’s ongoing trade war with the US and overall sobering of valuations after the WeWork debacle, said multiple founders and startup investors.
Boyu Capital, Horizons China, Sinovation Ventures, Legend Capital, ZhenFund, XVC Capital and Integrated Capital are among the new funds scouting for deals, people who have engaged with these companies told ET.
Corporate venture capitalists such as “Jingdong, Kunlun, Kuaishou, Ping An and YY.com, which have been evaluating India from the sidelines, are also looking at the country as a top investment market beyond China”, said one of the persons.
To be sure, India is not a fresh hunting ground for Chinese investors. Mega corporations, from Alibaba’s Alipay to Didi Chuxing, Xiaomi and Tencent, are well-entrenched in the Indian startup ecosystem, having backed the likes of Paytm, Swiggy and Ola.But now these tech giants and other early entrants such as CDH Investments, BAce Capital, Qiming Venture Partners, Morningside Ventures, Fosun, Hillhouse Capital, GGV Capital and Meituan are also accelerating investment activity.
This has led to a near-doubling of Chinese investments in Indian startups to $3.9 billion in 2019 up from $2 billion in the previous year, as reported earlier by ET.
“These investors have seen a similar bull cycle play out in China 5-8 years ago, and believe that India is now at an inflection point with enormous potential for technology and consumer investing,” said Pratik Poddar, principal at Nexus Venture Partners, an early-stage fund.
India-based investors believe slowing returns from venture and private equity deals in China over past five years is also a big reason why Chinese firms are looking away from their home country. In the fourth quarter of 2019, venture investments in tech startups in China dropped 51.5% over the previous year, according to the China Academy of Information and Communications Technology, a government-backed research institute.
“At the same time, early investors such as Shunwei Capital, Xiaomi, Fosun, Ant Financial and their large investments in (India’s) Zomato, Delhivery, ShareChat and Paytm have spurred interest in the Indian ecosystem,” said Anup Jain, managing partner, Orios Venture Partners.
Though India is also seeing some rationalisation in valuations, political stability and positive macro indicators like smartphone penetration, implementation of GST as well as the network created by Aadhaar have boosted investor confidence, said experts.
MOVING FASTER ON DEALS
Indian entrepreneurs are of the view that Chinese investors are now moving faster on deals, matching up valuations and are open to striking more flexible investment rights. This is especially true in sectors such as fintech, social commerce and content, said a founder who recently raised money from Tencent. The tech major, which operates messaging app WeChat, is one of the most active strategic investors in India, having taken fresh wagers on insurance marketplace PolicyBazaar, business-to-business ecommerce portal Udaan and video streaming platform MX Player, aside from writing smaller cheques.
MX Player is owned by Times Internet, a part of The Times Group, which publishes ET.
With a portfolio of more than a dozen companies, Tencent is in talks to back education technology startup Doubtnut and online self-publishing platform Pratilipi.
“Most of these funds already have a small exposure to India, and the intent is to accelerate their presence wherever they see parallels with China,” said a fund manager.
While Qiming made its first bet in India last year with Pratilipi, GGV backed KhataBook and Udaan, and CDH invested in startups such as Cashify and GlowRoad.
“Some funds and corporate VCs have tasted success in fintech, social commerce, gaming and content businesses in China, and want to leverage those learnings and take a similar path in India,” said Ashish Sharma, CEO at venture debt fund InnoVen Capital India.
“However, even with this exposure, their India allocation is quite small compared with the overall corpus,” he added.
HIRING PROS
Over the past few months, Chinese venture funds like Shunwei Capital, CDH Investments, Hillhouse, GGV, Mount Judi Ventures, Morningside Ventures, Tencent and Fosun have hired investment professionals in India as they look to step up deals.
Others are relying on investment banks and networks to reach out to entrepreneurs. In October, ET had reported that China’s investment banking majors, including TH Capital, China International Capital Corporation and Industrial & Commercial Bank of China, are on the lookout for deals in India. Also keen on investing are emerging investment banks such as Fanzhou Capital and Fusion Capital.
Starved of openings, Chinese Cos cross Great Wall to India
Over a dozen new China-domiciled corporations, venture funds and family offices are aggressively stepping up investment conversations with Indian startups as they look to move beyond the slowing market for technology investment in Asia’s largest economy.
The heightened interest in early-to-growth-stage Indian firms coincides with fewer Chinese startups going public, uncertainty caused by the country’s ongoing trade war with the US and overall sobering of valuations after the WeWork debacle, said multiple founders and startup investors.
Boyu Capital, Horizons China, Sinovation Ventures, Legend Capital, ZhenFund, XVC Capital and Integrated Capital are among the new funds scouting for deals, people who have engaged with these companies told ET.
Corporate venture capitalists such as “Jingdong, Kunlun, Kuaishou, Ping An and YY.com, which have been evaluating India from the sidelines, are also looking at the country as a top investment market beyond China”, said one of the persons.
To be sure, India is not a fresh hunting ground for Chinese investors. Mega corporations, from Alibaba’s Alipay to Didi Chuxing, Xiaomi and Tencent, are well-entrenched in the Indian startup ecosystem, having backed the likes of Paytm, Swiggy and Ola.But now these tech giants and other early entrants such as CDH Investments, BAce Capital, Qiming Venture Partners, Morningside Ventures, Fosun, Hillhouse Capital, GGV Capital and Meituan are also accelerating investment activity.
This has led to a near-doubling of Chinese investments in Indian startups to $3.9 billion in 2019 up from $2 billion in the previous year, as reported earlier by ET.
“These investors have seen a similar bull cycle play out in China 5-8 years ago, and believe that India is now at an inflection point with enormous potential for technology and consumer investing,” said Pratik Poddar, principal at Nexus Venture Partners, an early-stage fund.
India-based investors believe slowing returns from venture and private equity deals in China over past five years is also a big reason why Chinese firms are looking away from their home country. In the fourth quarter of 2019, venture investments in tech startups in China dropped 51.5% over the previous year, according to the China Academy of Information and Communications Technology, a government-backed research institute.
“At the same time, early investors such as Shunwei Capital, Xiaomi, Fosun, Ant Financial and their large investments in (India’s) Zomato, Delhivery, ShareChat and Paytm have spurred interest in the Indian ecosystem,” said Anup Jain, managing partner, Orios Venture Partners.
Though India is also seeing some rationalisation in valuations, political stability and positive macro indicators like smartphone penetration, implementation of GST as well as the network created by Aadhaar have boosted investor confidence, said experts.
MOVING FASTER ON DEALS
Indian entrepreneurs are of the view that Chinese investors are now moving faster on deals, matching up valuations and are open to striking more flexible investment rights. This is especially true in sectors such as fintech, social commerce and content, said a founder who recently raised money from Tencent. The tech major, which operates messaging app WeChat, is one of the most active strategic investors in India, having taken fresh wagers on insurance marketplace PolicyBazaar, business-to-business ecommerce portal Udaan and video streaming platform MX Player, aside from writing smaller cheques.
MX Player is owned by Times Internet, a part of The Times Group, which publishes ET.
With a portfolio of more than a dozen companies, Tencent is in talks to back education technology startup Doubtnut and online self-publishing platform Pratilipi.
“Most of these funds already have a small exposure to India, and the intent is to accelerate their presence wherever they see parallels with China,” said a fund manager.
While Qiming made its first bet in India last year with Pratilipi, GGV backed KhataBook and Udaan, and CDH invested in startups such as Cashify and GlowRoad.
“Some funds and corporate VCs have tasted success in fintech, social commerce, gaming and content businesses in China, and want to leverage those learnings and take a similar path in India,” said Ashish Sharma, CEO at venture debt fund InnoVen Capital India.
“However, even with this exposure, their India allocation is quite small compared with the overall corpus,” he added.
HIRING PROS
Over the past few months, Chinese venture funds like Shunwei Capital, CDH Investments, Hillhouse, GGV, Mount Judi Ventures, Morningside Ventures, Tencent and Fosun have hired investment professionals in India as they look to step up deals.
Others are relying on investment banks and networks to reach out to entrepreneurs. In October, ET had reported that China’s investment banking majors, including TH Capital, China International Capital Corporation and Industrial & Commercial Bank of China, are on the lookout for deals in India. Also keen on investing are emerging investment banks such as Fanzhou Capital and Fusion Capital.
Starved of openings, Chinese Cos cross Great Wall to India
India to double milk processing by 2025; every citizen to have this much more daily
Providing a big push to the country’s dairy industry, the Finance Minister Nirmala Sitharaman today announced that the government aims to take India’s milk processing capacity to double the current levels. While the country processes 53.5 million metric tonnes currently, the same will be scaled up to 108 million metric tonnes by 2025. With this, India’s per capita milk availability will also increase by about 394 grams per day. India has already multiplied its milk production by more than 10 times since 1950, following the White Revolution brought in by Dr Verghese Kurien.
India’s dairy production and consumption is on the rise the per capita consumption of milk has increased from 4.3 litre per month in urban areas in 1988 to 5.4 litres in 2012, according to government data. In rural areas as well, consumption has jumped from 3.2 litres per month to 4.3 litres per month. Previously, NITI Aayog had projected that the country’s milk production will touch 330 million tonnes by 2033.
To improve the condition of cattles and livestock, the government looks to eliminate diseases associated with them. “Our Government intents to eliminate Foot and Mouth Disease (FMD) and Brucellosis in cattle and also PPR in sheep and goat by 2025. We are confident that it will be completely eliminated by then,” FM Sitharaman said during her budget speech.
Improving the lives of those associated with agriculture and farming was one of the most anticipated budget reform this year. To that extent, the government has allocated Rs 2.83 lakh crore for agriculture, irrigation and allied sectors for FY21. The government also reiterated its goal of doubling the farmers’ income by 2022 and has announced a 16 points action plan for alleviating the agriculture sector.
Budget 2020: India to double milk processing by 2025; every citizen to have this much more daily
Providing a big push to the country’s dairy industry, the Finance Minister Nirmala Sitharaman today announced that the government aims to take India’s milk processing capacity to double the current levels. While the country processes 53.5 million metric tonnes currently, the same will be scaled up to 108 million metric tonnes by 2025. With this, India’s per capita milk availability will also increase by about 394 grams per day. India has already multiplied its milk production by more than 10 times since 1950, following the White Revolution brought in by Dr Verghese Kurien.
India’s dairy production and consumption is on the rise the per capita consumption of milk has increased from 4.3 litre per month in urban areas in 1988 to 5.4 litres in 2012, according to government data. In rural areas as well, consumption has jumped from 3.2 litres per month to 4.3 litres per month. Previously, NITI Aayog had projected that the country’s milk production will touch 330 million tonnes by 2033.
To improve the condition of cattles and livestock, the government looks to eliminate diseases associated with them. “Our Government intents to eliminate Foot and Mouth Disease (FMD) and Brucellosis in cattle and also PPR in sheep and goat by 2025. We are confident that it will be completely eliminated by then,” FM Sitharaman said during her budget speech.
Improving the lives of those associated with agriculture and farming was one of the most anticipated budget reform this year. To that extent, the government has allocated Rs 2.83 lakh crore for agriculture, irrigation and allied sectors for FY21. The government also reiterated its goal of doubling the farmers’ income by 2022 and has announced a 16 points action plan for alleviating the agriculture sector.
Budget 2020: India to double milk processing by 2025; every citizen to have this much more daily