China-India e-commerce collaborations show promising potential for cooperation

By Hu Weijia Source:Global Times Published: 2017/4/12 23:48:40

While many have been focusing on how Flipkart's fundraising could spark a realignment of forces in India's e-commerce marketplace, less attention has been paid to the bigger picture of industrial collaboration between India and China.

India's largest e-tailer Flipkart recently announced that it had received a $1.4 billion capital injection from various companies including Chinese Internet giant Tencent Holdings. The deal follows another fundraising case by Indian e-commerce payment Paytm who collected $177 million from Chinese giant Alibaba Group.

This series of high-profile collaborations demonstrates that India needs Chinese companies' capital and marketing experience, while Chinese firms have shown an increasing interest in India's burgeoning market and the country's IT talent. It can be expected that the two countries face a promising prospect for cooperation in Internet-related sectors.

How could an increasing number of collaborations in the area change the two country's economic picture? With the Make in India campaign initiated by the Modi administration, India is in urgent need of building an integrated market throughout the country as China has done. Developing e-commerce may be an effective way to crack down on regional protectionism by setting up a unified sales platform for vendors and customers from different Indian states. Such new emerging business models made available by Internet technology will help the Modi administration intensify free, fair and orderly market competition and thus unleash market vitality in the emerging country.

In terms of India's external trade, it is possible that Internet-related cooperation between China and India will eventually lead to market integration as online platforms give vendors a direct access between the two countries. When it comes to market integration, one plus one will be greater than two if companies from both sides can take advantage of their economic complementarity to stimulate greater domestic demand.

Around a third of the world's population live in China and India, two of the world's major emerging economies that are seeing a fast-expanding middle class. Economic integration is likely to create immeasurable market potential and thus push both economies into a new stage.

Market integration will also have an impact on Asian industrial chains, during which India is likely to become a more attractive destination for foreign investment, including from China. Many Chinese manufacturers may transfer their factories to India as demand for their products increases in the South Asian country.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

Posted in: EYE ON THE ECONOMY

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