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Dhanasree Molugu

Dhanasree is an analyst with Blume Ventures. She holds the distinction of being Blume’s youngest team member and focuses on investment research, building investment theses and portfolio management.

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Startup India Vs Startup China: The Similarities

How is India’s biggest competitor faring? An onground perspective from Blume Ventures direct from China

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Fresh from a 2-week long trip to China after interacting closely with various stakeholders in the Chinese startup ecosystem – investors, startups, BAT (-B) and government officials, here’s the first post to capture the rich learnings.

How similar is India to China?

1. Customer behaviour – Our first takeaway from the trip is that Indian customers are similar to Chinese customers rather than US customers. This may stem from the fact that the personal expenditure per capita in India is $1,012 closer to China’s ($3,005) vs US ($37,206).

The behavioural similarities are:

a) Both Chinese and Indian customers are equally sensitive to small changes in their wealth.

b) Very much like in India, majority of the Chinese consumers are not particularly loyal to a brand when there is no major differentiation in offering.

c) Also, unlike what’s widely being sensationalised, most day to day transactions are not via WeChat and cash is still highly preferred. I would argue that even though the penetration of electronic payment platforms like WePay is higher compared to India (owing to the large feet on street sales force for these platforms), the acceptance or usage by common customers is not drastically higher than India.

d) Millenials are the Chief Procurement Officers (a term coined by Kunal Shah of Freecharge) of the Chinese households much like in India. We had an opportunity to engage with students of Peking University and gathered that the student behaviour is similar to Indians with regards to incentives, adoption of new concepts and products.

e) Another similarity is that the majority of the customer base cares more about the functionality elements of the product vs the design.

2. Market Potential – Owing to the similarity in population and rate of digital penetration, the market potential for both these countries is immense and in case of India, greatly untapped. The B2C market for ecommerce, consumer goods is huge in both the economies, but B2B market potential for SaaS is higher in India compared to China, based on our conversations.

3. Entrepreneurship Spirit – We could see the same spirit and zeal in founders of both nationalities. There is a strong desire to build great businesses and differentiated products. There is also a common focus to build solutions for the local market’s specific problems instead of merely following the footsteps of western innovation.

Note – These are my observations and learnings from conversations and talks as part of the China – India Dialog 2017 delegation. The points mentioned above have been supported with requisite data sources wherever possible.

Blume Ventures also has photos to help this article. Find them here.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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