PwC survey on Chinese unicorns showed most companies slowing overseas business plans for pandemic and geopolitics reasons, with India failing to attract a single firm
Published: Feb 03, 2021 05:18 PM

A view of PwC office in Beijing in January. Photo: VCG

A survey report released by PricewaterhouseCoopers (PwC) on Wednesday discussing Chinese unicorn companies showed that literally no interviewed companies selected India as their first priority for overseas business exploration, a sharp decline from the year of 2019 as the two countries' relations plumbed new depths. 

Unicorn companies generally refer to private startups that are younger than 10 years old with a valuation of more than $1 billion. 

According to the PwC China Unicorn CEO Survey 2020, which interviewed more than 100 companies and 20 senior executives, none of the respondents said they would choose India as their first priority for overseas expansion. One year earlier, however, 23 percent of the interviewees said they would. 

Gao Jianbin, PwC China TMT Industry Leader, said that the change was mainly due to the Indian government's unfriendly policies toward Chinese TMT companies. 

"It again showed that geopolitical policy changes are a very important factor to unicorn companies' global strategies," Gao told the Global Times on Wednesday during a press conference. 

The Indian government has banned hundreds of mobile apps, many of which are of Chinese origin, since mid-2020. The banned apps include TikTok and PuBG. 

According to the PwC report, Asia-Pacific regions are a favorite for Chinese unicorn companies, with 36 percent of the interviewees said that they would consider the area as their first priority for overseas business expansion. 

North America is also a favored area despite the uncertainties in China-US relations, as the US market and talents are still of great appeal to Chinese companies, PwC analysts said. In the survey, 31 percent of the respondents said they consider the North American area as their first choice for expansion. In total, 14 percent of respondents said they would choose the Belt and Road countries as their top priority for overseas expansion. 

However, the report also showed that in general, the unicorns have slowed their pace of overseas growth because of the pandemic and international political complexities. In 2020, 59 percent of the interviewees said that they would delay or have no overseas expansion plans, compared with only 25 percent one year earlier. 

The proportion of companies that plan to list in A-share markets also rose from 43 percent in 2019 to 59 percent in 2020, with the Science and Technology Innovation Board being their first consideration. 

The survey also showed that the pandemic didn't have the traumatic impact that many companies had expected, as only 38 percent of the unicorn companies said they considered the pandemic as having a great impact on their business, and 51 percent of the respondents thought the positive impact brought from the pandemic is greater than negative impact, as the pandemic brought opportunities to industries like medical health and e-commerce. 

Most respondents were also upbeat about their business prospects, with 74 percent of the interviewees said they expected a revenue growth of more than 50 percent this year.