India vs China: Indian Startup Unicorns like Flipkart, Zomato under Twitter Attack

Yash Raj Srivastava Yash Raj Srivastava
Jun 19, 2020 4 min read
India vs China: Indian Startup Unicorns like Flipkart, Zomato under Twitter Attack

Indian based startup unicorns like Flipkart, Zomato, Swiggy and Paytm have recently been under the radar of twitteratis accusing them getting invested from Chinese investors. This anger has abruptly taken a rise after the deceitful act done by China at the Galwan Valley killing 20 of the Indian soldiers.

celibrities like Paresh Rawal also came forward
People showing anger over twitter

People have shown their anger on twitter and has also suggested to start boycotting the services of these applications which are either china based or being funded by Chinese investors all over India.

Also Read: #BoycottChineseProduct Forced Paytm to Change Shareholding Pattern On Wikipedia-as per Twitteratis

Many users have asked that these companies should get their stakes back as most of the stakes of these companies are in their hold.

How Flipkart Responding To The Situation

Providing them health insurance and other financial supports
Flipkart trying to help Indian sellers

People on Twitter are asking people to boycott and it can be a harm to their current market situation. Although they have not come with any formal response regarding this but they posted a photo informing people that how they are trying to help sellers across India to work hard and how they will support them by providing them health insurance plans, by laying off the storage fees and trying to provide flexible work policies making them feel more comfortable and helping these sellers to ease their work.

Also Read: India China Standoff: Telecom Ministry Of India strictly orders MTNL BSNL to Ban Chinese Equipments

China has created a large effect in Indian market by investing frequently in the past 5 to 6 years. Many of the Indian homegrown startups have been backed up by Chinese investors. China has been a key investors in the technological development of Indian market.

An industry executive asked to keep anonymous said "The overall sentiment is anti-China and that is building on various counts which have now been aggregated. A lot will depend on whether or not the government wants to play the hardball,"  

Also Read: List of Banned Chinese Apps in India

Adding to it he said, "The social media storm was inevitable. In the past also we have seen how some apps were downgraded citing 'national interest'. There could also be some direct business impact for the time being. However, how it will reflect in the long term will totally depend on the way the government plans to handle the current situation."

China's Investment in Numbers

A source named Gateway House has estimated around $4 billion of investments have been done by them in India's technology based Startups in 2019 while $2 billion investment was done in the year 2018. Moreover, atleast 18 of the top 30 startups in India are being backed by Chinese investors.

Also Read: How India is Boycotting Chinese products

Ant Financial, Tencent, Shunwei Capital, Alibaba are some of the big Chinese investors who have their stake in Indian based unicorns. Ant Financial has been the prime investor across India with an investment of around $2.7bn investment.

Well, a startup founder has also stated that after the month of April the Chinese investments have started to come down due to which the doors have been opened for other avenues which are based in UK, USA, Middle East and India.

E commerce Analyst Predicting The Future Outcomes

Sreedhar Prasad an independent eCommerce analyst has said, "Fresh investments will take time because everyone is cautious as to what will happen next. There is going to be a bit of a lull because the sentiment is certainly low. Both Wuhan and border tensions have come at the same time. There is an element of negativity. However, it will not have a major impact on the existing companies operating in India that have Chinese investors on board. The very fact that Chinese companies have invested in Indian firms, doesn't make them 'Chinese products'. There are so many Indian companies that have set up manufacturing units in China. If we keep on boycotting things like this, we will end up hurting our own economy and the talent growth"

Snapdeal Coming Forward With A Statement

While companies like Flipkart, Ola, Zomato, Swiggy and Oyo has not given any formal statement or uttered any word regarding this but Snapdeal came forward to give the following statement, "Snapdeal has always been focused on creating opportunities and access for India's small and medium businesses - sellers and manufacturers. For over a decade, we have championed the cause of Indian MSMEs and provided them with a platform to grow and succeed. As a proudly Indian company, we remain committed and steadfast in this mission." Alibaba has a share of around $500mn in Snapdeal.

Although it will be a hard road for India on the economic front for a while as their is a ban on the investments by the world's second largest economy but it will help in getting invested by other countries too which are more reliable and will help creating a good relationship with them. Also, it will be helping all the Indian based startups and entrepreneurs and provide them with a great opportunity in the near future.

With the current tensions at the border it looks impossible for a while to expect a good relations with China and the spread of the deadly coronavirus will also play an important role for the Chinese market as many countries would give a second thought to have a economic relations with them.

USA being the world's largest economy and showing some disinterest in China for the past two three months too can look forward to India and can become a prime investors in these firms.

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