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Foreign Direct Investment

  • ~ By Charmaine Mirza

    There’s no sale without scale. Or at least not in the virtual world. Ladies and gentlemen, grab your mouse tightly – the great e-commerce chess game has begun.

    As the Amazonian giant from the USA makes its great leap into the subcontinent, local e-commerce players in India, such as Flipkart and Snapdeal are scrambling. But wait – there just maybe a silver lining in the offing, as China rubs its magic lamp and produces an investor in the form of Alibaba.

    In a dramatic move that has swiveled eyeballs in the FinTech world, Alibaba has agreed to double up on its investment – putting down 1,100 crore (Approx. US$177 million) to increase its stake in PayTM, and more significantly, launch PayTM Mall, a direct rival to homegrown e-commerce players.

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  • ~ by Charmaine Mirza

    “…you cannot ignore a fifth of the world’s population…as an entrepreneur, if you have the opportunity to build both Amazon and Alibaba at the same time, you’d be crazy not to try.”

    Travis Kalenick, CEO Uber.

    Is Uber’s unicorn cowboy trying to do precisely this?

    As the date for its hyped up IPO draws closer, investors are questioning whether the unicorn will be a rainmaker – or be reined in.

    On the surface, it appears as if Kalenick has sacrificed his Alibaba genie for the Amazonian advantage. After losing two billion USD initially in a head to head battle with Chinese rival Didi Chuxing, Uber has “closed” its China operations, a move that investors see as positive, given the losses it has racked up – but will it turn the tide completely for Uber’s global push?

    Inchin Closer reviews the situation from an Asian perspective.

    • Is Uber moving out of China or simply taking a strategic side-step that may light its candle at both ends – for its US IPO, and its Chinese market share?
    • Is Didi a friendly investor or a dragon crouching in the shadows, waiting for the right moment?
    • Is Uber really being bought out, as it claims, or buying in?

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  • kfcYum Brands is undergoing a strategic shift in China, signaling towards changing market trends and slowing revenue. The brand under which KFC, Pizza Hut and Taco Bell operate decided to spin off its China business into a separate entity last year. As part of the realignment, CEO China of Yum Brands Inc Muktesh Pant sold 91,228 shares of Yum on the 22nd of July, for US$8.2 million.

    The Indian born CEO, of Yum China led the China entity to be the company’s highest profit earner. At the end of February 2016, Yum had over 5,000 KFC restaurants in China, accounting for a quarter of KFC restaurants worldwide. It also held more than 1600 Pizza Huts, in more than 400 cities and had acquired Little Sheep hot pot due to burgeoging demand in the Fast food space.

    However, as tastes changed – being healthy came back into vogue and the the brands faced backlash due to their involvement in International uprisings, the Yum brand faced sever criticism in local media resulting in a fall in revenue. Although China remains the company’s primary source of profit the company’s revenues fell from US$ 6.898 billion in 2012 to US$ 6.909 billion in 2015. The latest performance report shows that in the first half of 2016, Yum clocked revenues of US$ 5.627 billion, down 1.75 percent.cheap bns goldbuy bns gold

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  • cnfdi

    ~By Charmaine Mirza

    Chinese investment in India’s real estate sector increased six-fold in 2015, topping out at approx. US$870 million. The door is still wide open. The Indian government’s decision to allow 100 percent Foreign Direct Investment into the real estate sector has lead to a spike in interest from Chinese investors.

    Haryana has certainly jumped on the bandwagon. Dalian Wanda’s MoU with the Haryana State government to develop the Wanda Industrial New City that spreads over 100 kilometers, has flagged off a trickle of investment from China into India that could turn into a steady stream.

    China Fortune Land Development is also sizing up large-scale industrial park projects in Haryana, while Gezhouba, another real estate player from the mainland, is eyeing an investment in Telengana. Not to be left far behind, Madhya Pradesh is also seeking Chinese help to develop large scale industrial projects, while in the private sector, financing major China Fosun International, is considering investing in Locon Solutions, the owner of housing finance start up, Housing.com.

    So why is there such a sudden gold rush from China into India’s real estate segment?

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  • BATWe live in an interesting investment climate, where India and China can’t either do with or without each other. Cross border investments in online apps and platforms are breaking traditional barriers and creating healthy, profitable companies for both nations.

    For the Indian start-up market to flourish, Chinese investments are important and a vital cog in the wheel that will turn the Indian economy around. For Chinese investors, India is a massive market, similar to theirs, with a huge growth potential. Smell a win-win situation?

    Yet there are hurdles, a lack of political will and diplomatic trust enter at various points in a healthy India-China relationship to often mar the smooth functioning and often put a spanner in the works. However, since there is a strong potential that the bond between India and China will withstand political head winds, Inchin Closer takes a look at the India strategy for the Big 3 Chinese investment heavy weights – Baidu, Alibaba and Tencent – or BAT as they are more commonly referred to. The article aims to demonstrate where these investment bell weathers are now and the direction they are looking at. It is expected to foretell, the direction Chinese investments into India will take and subsequently how the rest will follow.

    ALIBABA: A scion for a variety of low priced goods, Alibaba has recently tied up with Indian payments gateways Paytm to initially allow select Indian Indian sellers to source products from China at cheaper rates as well as help them with logistics and payments. India is an inevitable market for Alibaba for whom a developing market in search of cheap goods is perfect, as compared to Europe. As a result, Alibaba India already has 4.5 million registered users, making it the world’s second largest market for Alibaba after China. Additionally, Alibaba invested US$680 million into Paytm last September making it the largest investor in the mobile payments leader. In October, Alibaba joined softbank to invest US$125 million out of a consolidated investment of US$500 million into Snapdeal an online shopping portal.

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  • jaitley + guoliIndian Finance Minister Arun Jaitley is on a five day tour of China to pitch for Chinese investments from the slowing Chinese economy. India which is on a growth trajectory is aiming for 7.5 to 8 percent GDP growth at a time when China’s GDP has decelerated to 7 percent. While the Chinese are interested in investing in India – a neighbour and a large market most investors are yet skeptical on her policies. Mr. Jaitley’s aim is to convince Chinese bankers and wealth fund managers to invest in India.

    The finance minister is not alone. His visit was proceeded by the Chief Minister of several Indian states, the last being Mr. Shivraj Singh Chouhan, the CM of India’s central and second largest state Madhya Pradesh who was in Beijing, Shanghai and Guangzhou last week with a 20+ member business delegation to pump investments into his state. Madhya Pradesh has already allotted land at Pithampur towards Chinese investments in automobiles, pharmaceuticals and technology and has promised massive discounts in land, taxes and electricity.

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  • NSG

    ~ By Charmaine Mirza

    The Asian hotpot is simmering again. India’s bid to join the Nuclear Suppliers Group (NSG) has put Sino-Indian geopolitics back in focus – this time with the added masala of India’s arch nemesis and China’s ally: Pakistan.

    The Nuclear Suppliers Group is a group of nuclear supplier countries, which aim to stave off nuclear proliferation by monitoring exports of raw materials, equipment and technology that can be deployed to create nuclear weapons.

    China is spearheading strong resistance from a handful of member countries to India’s NSG bid.

    Beijing’s official party line is that India has not signed the Non Proliferation Treaty (NPT), which is a vital criterion for membership to the NSG.

    The not-so-subtle subtext is that Pakistan has also retaliated to India’s NSG bid with one of its own – and China is the key instigator behind Pakistan’s nuclear program.

    In an ironic twist of fate, India will have to bear the brunt of Pakistan’s poor track record. If Pakistan doesn’t get in, India’s not getting China’s vote.

    If Pakistan has built its nuclear resources from the ground up, it is largely due to the fact that China has supported it consistently, in gross violation of its own commitment to the NSG. Given Pakistan’s dubious track record of harbouring terrorists (it hasn’t signed the NPT either) and the fact that the father of its nuclear program sold nuclear technology and secrets to Iran and North Korea, red flags are waving madly across the globe about its acceptance into the NSG.

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  • herbal-formula-2

    ~ By Charmaine Mirza

    Indian pharmaceuticals have been trying to enter the Chinese market for a while. Priced cheaper than drugs available on the Mainland, Indian pharma companies have always been kept at bay for fear that they may disrupt the industry. However, there might be light at the end of this tunnel. Shanghai based Fosun Pharmaceuticals has recently emerged as the billion-dollar bidder for India’s KKR backed Gland Pharma, outstripping US-based Baxter and Advent, as it aims to increase its research and manufacturing prowess.

    As China gets old before she gets rich, the pharmaceutical industry is now waking up to partnering with Indian drug companies to benefit their billion plus populations and avoid a healthcare meltdown.

    Both ancient nations have their medical advantages –

    –       China and India supply much of the world (and the same pharma multi-nationals) with their APIs (Active Pharmaceutical Ingredients) and generics.

    –       The roots of modern medicine lie in two ancient systems – Traditional Chinese Medicine and Ayurveda.

    So who really wields the whip in this pharmaceutical circus? Inchin Closer pauses to examine the larger picture.

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  • ma-modiWith most of the money pouring into start-ups across China and India drying up, investors are getting a lot more sharp edged and nickel nosed about where they put their money.

    China’s slowing economy earlier pushed several investors to India to reap rich dividends from her large population. However Chinese companies now too are second guessing putting their money into India and are rather cooling their heels even as the summer approaches. Several Chinese companies including Qufenqi, a student loan company owned by Alibaba which was looking at buying into an Indian student loan firm have back tracked and are no longer interested in the Indian market as of now.

    The only beacon on the horizon seems to be Jack Ma’s Alibaba who are keen to enter India’s burgeoning e-commerce market. India is roughly estimated to be 5 years behind that of China when it comes to the adoption and implementation of new technology. This gives Alibaba a huge head start in implementing strategy for a market similar in size and value to China, and also a great advantage in knowing where the market is headed.

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  • 153917_600Two complementary, interesting trends are emerging from the warmer understanding between China and India and both nations fierce desire to constantly grow.

    Firstly, Chinese investors are eagerly watching the Indian market, coming to investigate investments and often pouring millions into Indian start ups as the Indian economy starts to trot at a slightly faster clip than the Chinese economy.

    The second interesting, emerging trend is that with the Chinese economy far ahead that of India, many entrepreneurs, venture capitalists and private equity players are visiting small to mid sized firms and start up conferences to understand and predict where the Indian market will be five to ten years from now.

    The mix of these two trends, is seeing a higher and more sophisticated level of transactions between the sweet and sour neighbours. While all of this is government agnostic, it is building stronger relationships between the two nations and filling a need gap in both economies. The Chinese have a new, energetic market to invest in and Indian start ups have an orb to see the future.

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