Asia’s second-largest economy and world’s second-most populous country, India, attracted a handful of Chinese and Southeast Asian firms this year, that launched their operations in the country to grab a share of the country’s fast-growing internet economy, poised to reach USD 1 trillion by 2025.
From logistics to video streaming, to e-commerce to software services—India witnessed an increased cross border action from its Asian peers. KrASIA reviewed the year gone by (well, almost) and came up with the top five meaningful events and trends that would set the tone for 2020.
1. Lalamove parks its trucks in India
Hong Kong-based logistics firm Lalamove, which is present in over 140 cities across China and Southeast Asia entered India in early February. The six-year-old company that does same-day delivery is a marketplace of trucks and two-wheelers that works similar to ride-hailing services such as Didi, Uber, and Ola. It claims to deliver products in an hour. Within a month of rolling out its services in Mumbai, India’s financial capital, Lalamove has on-boarded 2,000 truck drivers, 8,000 two-wheelers, and 20,000 registered users.
In 2019, it expanded its operations to the top six cities including Delhi, Bengaluru, and Chennai. While the company focuses on B2B, primarily small and medium enterprises (SMEs), a small portion of its business is also B2C, with which it will deliver parcels under 20kilograms on two-wheelers and also help people when they are moving houses. Vying for India’s USD 160 billion logistics market, it competes with homegrown last-mile delivery startups like Shadowfax, Porter, and Lets Transport.
2. Gay video streaming service GagaOOLala starts screening in India
Following India’s decision to decriminalize homosexuality in September 2018, Taipei-headquartered and Asia’s first LGBTQ-focussed video streaming service GagaOOLala entered India in mid-2019. Popularly known as Asia’s ‘gay Netflix’, GagaOOLala is owned and run by Taiwanese production house Portico Media. Its CEO Jay Lin, who is a former Silicon Valley lawyer, an LGBT activist, and a co-founder of Taiwan International Queer Film Festival, launched the service in Taiwan in late 2016. At present, it is present in over 20 Asian countries including India, Pakistan, Afganistan, Singapore, Indonesia, Laos, Macau, Malaysia, Sri Lanka, Thailand, and Vietnam.
In India’s USD 500-million-plus video-on-demand market that is projected to touch USD 5 billion by 2023, GagaOOLala offers more than 370 titles including India gay films such as Devi, Sundar, and Guy Next Door, under the freemium model. Lin, in an interview with Reuters in March, said in India, he was hoping to not just stream the service but also find local producers and directors that he could collaborate with.
3. Kingsoft Office marks its official entry in India
Kingsoft Office, a subsidiary of the 30-year-old Chinese giant Kingsoft Group, although has been present in India, it officially announced its services in the country mid this year. Kingsoft Office, the Chinese version of Microsoft Office, is backed by Xiaomi’s founder and current chairman, Lei Jun. The Beijing-headquartered office software solutions provider claims to have one billion users worldwide across its portfolio of office suite products such as WPS Office and Kingsoft PowerWord, an e-dictionary, for Windows, Linux, Android, and iOS.
While the Chinese office suite provider made its products available in early 2012, it was only this year in March that the company established an office in Bengaluru with a ten-member team to focus on localization and operations. In August, it launched its latest product, WPS 2020, in the country and said it would invest a quarter of USD 300 million that it plans to raise through its upcoming IPO (initial public offering) for international expansion, and India would be a critical part of that plan. In November, Kingsoft Office got listed in Shanghai’s Star Market and raised USD 640 million. The company claimed to have garnered over 20 million monthly active users in India across all platforms over the last few years through its partner ecosystem of smartphones and laptop manufacturers such as Xiaomi, Huawei, Oppo, Vivo, Asus, and TCL. This makes the South Asian nation its second-largest market after China.
4. Qoo10 paved its way into India market
Singapore’s top e-commerce platform Qoo10 acquired an eight-year-old Indian online marketplace ShopClues—a beleaguered company once valued at over a billion-dollar—for reportedly USD 80 million in November, marking its entry into India’s USD 30 billion e-commerce industry. With ShopClues in its kitty, Qoo10 said its merchants and its cross-border logistics business will get access to the large Indian market. Meanwhile, ShopClues will be able to “access global markets via Qoo10’s presence in Southeast Asia.”
Qoo10, which operates localized marketplaces in Singapore, Malaysia, Indonesia, Hong Kong, and China, has been sharpening its focus in Southeast Asia after it sold its Japan business to its former investor eBay mid last year. ShopClues’acquisition is likely to help the nine-year-old Singaporean e-tailer expand its business in South Asia. The move is in line with Qoo10’s ambition to become profitable by the second half of 2020 and to file for an IPO the year after.
5. YY gained traction in India giving Bytedance a tough competition
After growing silently for two years in India—Asia’s second-largest economy—the short video app came out of its stealth mode in 2019 to give an open fight to its competitors in the country’s booming content-sharing and live-streaming market.
ByteDance runs short video apps and content sharing apps such as Tik Tok, Helo, and Vigo Video in India and claims to have 200 million, 40 million, and 20 million monthly users in the country, respectively. In comparison, YY’s short video app Like and live streaming app Bigo Live have crossed about 60 million users each. To push its growth further, ByteDance committed over USD 1 billion investment over the next three years in the country to focus on various areas, including expanding content partnerships across platforms, building tech infrastructure and expanding the workforce.
In an earlier interview, the company said it is in hyper-growth mode with more than 500 employees and wants to double by the end of 2019. YY, on the other hand, has invested over USD 100 million in regional research and development and has hired more than 700 content moderators so that it doesn’t annoy the Indian government that has been keeping a keen eye on these platforms. The Guangzhou-headquartered company also has aspirations to enter India’s online tutoring segment, which is expected to grow to USD 1.96 billion in 2021.
More cross-border action expected
Analysts expect more companies from China, Hong Kong, and Southeast Asia (SEA) to veer into the India market specifically in logistics and e-commerce verticals.
“We expect to see more entries in sectors like logistics, fashion, beauty, cosmetics, and baby products in India,” Satish Meena, analyst, Forrester, told KrASIA. One of the main reasons for Southeast Asian companies looking at India, Meena said, is that they have reached the saturation point in their main markets. “They can’t go to China, Japan or South Korea (because these markets are saturated). Thus, India may be the next destination for them, although it would depend on companies’ ambitions and the sectors they are in.”
Now that India has tweaked foreign trade policy rules banning the ‘gift route’, which earlier allowed cross-border e-tailers to ship packages up to USD 70 (INR 5,000) to India without any import duties, the Asian companies that are serious towards India market would need to invest in setting up operations in the country, as they can no longer operate sitting out. Ultimately, India has a decent enough buyer base which they want to tap into, and in some categories, in terms of the number of buyers, India is almost equal to the Southeast Asian region, Meena believes.
Over the past year, India also witnessed a growing craze for video streaming, which may interest other SEA players.
“With the rise of new e-commerce channels like video streaming, influencers, and group buying, these (Asian) entities and funds will enter India either through a strategic investment in Indian startups or by directly setting up a shop,” Meena said.