Products . . Tiger sniffs the young group

Author . . Hu Zhanjia

Captions . . Figure worm idea

Jiyin overseas version of Tik Tok, information products Helo, live platform Bigo Live, short video platform Vmate.... At a time when China's mobile Internet dividend is disappearing, India, with its geographical proximity and population, is becoming the most cosmopolito for Chinese entrepreneurs.

Mysterious ancient country, complex religion, rising economy. Not only Bollywood, Amir Khan, but also curry, moths and generics, India, is seen as the blue sea market that breeds the "next billion-class APP".

Carrying the sea wind, the international giants are also in India, the United States Wal-Mart, Amazon, domestic Ali, Tencent, are actively cultivating their own strength in India. Amazon builds Indian subsidiary, Wal-Mart buys local e-commerce company Flipkart, Ali invests in Paytm and BigBasket...

Beyond the giants, a large number of small and medium-sized entrepreneurs are flocking to India, which they find far more complex than they think when they come to India with the dream of harvesting the next China.

You can't afford to burn money in the giant seams

In July 2018, Zhu Dong, who had worked as a product director for six rooms and trained in live business, embarked on a trip to The Nuggets in India with four 90s.

Unlike large companies directly migrating the platform overseas, Zhu Dong and the team mainly do short video content accounts, when shaking sound, fast hands and other short video platforms, in China has been done feng shui, different from "Silicon Valley creation, China replication", short video live products as one of the few Chinese model copied to overseas products, Zhu Dong also hope to get a piece of it.

"But it's too hard to make money in India." Zhu Donglian feeling.

YouTube is already a stand-alone video platform in India. All content start-up teams distribute content on YouTube, and YouTube's own ad-sharing model allows many people to do content, and you can live well with ad-sharing. It has also hampered the education market in the early days, with locals in India more accustomed to taking SLR videos and putting them on YouTube.

In addition to YouTube, Facebook, Google, Instagram, Netflix... In India, it's almost entirely american-made APPS. "It's a country ruled by app in the United States." Zhu Dong said.

Zhu Dong's team's office building in India is located in the city of Mabang Pune

Zhu Dong told The Local that they were playing with PC-era stuff, and that it must be the vertical screen era, the short video age, when Tik Tok's daily life in India had reached 10 million. So the team put the content main position on platforms such as Tik Tok. In the absence of any promotion, the platform's largest content account has more than half a million followers in three months, "India's user base is basically one-tenth of the size of the country, this volume is equivalent to doing 5 million fans at home." Zhu Dong said.

"But by then Tik Tok had stopped subsidizing content creators and was going to platforms like Google and Facebook to advertise and buy users." Zhu Dong said,In India, most of the annual advertising goes to traditional media such as television and newspapers, as well as to appPes in the United States, which have long occupied the marketIn the indian market, which is gaining momentum, byte beats spending nearly $10 million on television and online advertising, The Information reported, citing people familiar with the matter.

"Short video start-ups in China are burning money in India." Zhu Dong said.

In the middle of the giant, the money-burning Zhu Dong and his team suffered an existential crisis, "can only afford the Indians, but can not afford to Chinese." "In India, the average labor cost for locals is less than 2,000 yuan a month; In addition, the Chinese not play a big role in the local, "the language does not understand, customs and habits do not understand." "

Zhu Dong and his Indian colleagues

One social reality that can't be ignored by entrepreneurs in India is language.

According to statistics, there are 1,652 official languages and dialects in India, nearly 100 popular languages, a total of 22 officially recognized languages, more than a million people use 33, India has 28 states, each state has its own language.

Although the official language is English, only 6% to 10% speak English, and many are upper-class.Zhu Dong's native Indian team, mostly recent college graduates, speak Hindi, Mar-a-Lago and English, but to the south, locals speak Tamil.

Language differences between states are common. Even Indians and Indians often communicate by making gestures. Therefore, if you want to reach more people, all APPS need to be multilingual. "It's basically hard to do."

"Fast hands have basically given up on the Indian market." Zhu Dong said.

According to him, the Tik Tok team, based in Wework, Mumbai, currently has only a small Chinese, and many entrepreneurs, including Zhu Dong, were less enthusiastic about the Indian market during Tik Tok's launch this year. After seeing this situation, investors also chose to divest, and finally Zhu Dong had to leave India with most of the Chinese team.

China's product thinking, Indians do not understand

"A lot of people who have just come Chinese don't know about this side, so there's no way to localize it at all." Su Qiang, who works in social e-commerce in India, says.

Su Qiang, who came to India in 2012, is an "old India", first trading in southern India and consulting firm in northern India. In February this year, Su Qiang joined the social e-commerce company Shenzhen Sevi, responsible for the promotion and operation of the Indian market, and with the domestic product team to complete the landing of the Indian market.

And when the domestic team designed the first version of the product interface, Su Qiang directly overturned. Judging from his past,India is a country where "drivers sometimes don't understand GPS." "

In the Indian market, Sevi's users are mainly targeted at hot moms, including housewives, public officials, etc., who earn commissions by sharing products at the click of a button, "social e-commerce focuses on sharing operations, but the first version of the Chinese team is too complicated for Indians to understand." "

In the real operation of the product, Su Qiang also encountered problems in China can not imagine. In June for product testing, Su Qiang found a local logistics company specializing in e-commerce for docking, but subject to local customs and working habits, signed the document three times before and after.

When docking with Indian companies, Indian language habits are mixed with local vocabulary and usage. For older Indians like Su Qiang, language is a problem, but for other employees, it's the first challenge to develop locally.

In his words, people who speak Good English at home, when they get to India, you'll doubt life.In India, more than 100 million people are proficient in English, while 20 per cent are completely illiterate. On one occasion they did an event in northern India to promote Hindi, but it caused a great displeasure in the south, "because the Southern Toho could not read Hindi." "

In addition to the operational challenges posed by language fragmentation, the gap between rich and poor between races has caused problems in the promotion of products.

The extremely unbalanced split of "Left Eye Paradise, Right Eye Hell" is a true reflection of India.The poor and the rich are staggered together, the last second you may be in and out of a five-star hotel, the next second of eyes may be slums.

In India, the biggest social product is WhatsApp, so when Su Qiang used WhatsApp to reach 300 groups in two weeks, the most complaint calls were received every day. In Indian social habits, as long as each other in the same group, you default to very familiar.

"Sevi's group of hot moms is also divided into 369, rich women, the poor are likely to be in the same group, and of course there are men in the group." Because there is no charge for phone calls in India, many men not only call women directly, but also send a variety of pornographic photos, which makes the Su Qiang team have to abandon this promotional path.

"It's hard to promote, how do you make money?" Su Qiang sniffed to the tiger, said that the company that does e-commerce in India is basically a lament.

The most common form of payment in the area is cash, with only a very small number of people having credit cards and fewer than 10 per cent holding savings cards, which makes it unimaginable for e-commerce.

"So why stay in India?"

"Wait, wait for India (the market) to break out."

Although some entrepreneurs have left India, some are still convinced that the country will have a strong purchasing power population in the near future.India's population as a whole is pushing China, and its age structure is younger, with 65% of the population under 35 and a much longer proportion of people aged 0-24 than in China.

They expect this group of people to be like China's middle class, bringing a higher level of transformation to their products.

Eighty percent of India's 500 million Internet users are poor

In the Economist's research, forecasts for the Indian market say that the Indian middle class, which big companies are looking forward to supporting a new boom and consumer feast, will emerge soon, but this group is virtually non-existent in reality.

India's top 1 per cent of the rich are only about the size of Hong Kong, the next 9 per cent are close to central Europe, and some 500m people live close to the poorest parts of Africa, a far from China's economic picture.

The Indian film "Slumdog Millionaire", which was released in China in 2009, tells the story of a poor young man who grew up in a slum

Li Jian, founder of Yan Dao, who has long been involved in venture capital market research in India, also expressed the same view to tiger sniffing.

According to him, more than 500 million people use the Internet in India, 40 million rich people, 100 million people who have reached China's well-off level, 400 million people equivalent to the middle and lower levels of Chinese cities and towns, and then the non-Internet population.

It is the 40 million rich who have greater purchasing power.

But this group is already facing a mature market, they watch videos using Netflix, shopping with Amazon, searching with Google, socializing with Facebook, "most Chinese entrepreneurs do products that are essentially aimed at those 400 million people, but are basically useless and difficult to do." Because 400 million people can't cash in, it makes it difficult for the company to make a profit. "

This means that the demographic dividends Chinese the people who attracted them in the first place are not in exchange for effective business transformation.

Lou Yun, founder of social e-commerce company Club Factory, chose to focus on the Indian market after testing water in major parts of the world, and in his view India is expected to replicate China's development miracle in the future. 

What he saw was that in the past two years, thanks to the emergence of jio's free-to-air catfish into the telecommunications market, India's communications construction has made a big leap forward, with 170 days to harvest 100 million new users, and Jio's 4G service has ushered in an explosion of Internet users in India.

But after entering India, Lou Yun found that "although India's mobile Internet population has 500 million, but only 100 million can buy physical goods from the Internet, equivalent to e-commerce, the Indian market is just beginning to be excavated." Lou Yun also admits that Club Factory in India is not profitable. "

India's rising internet users (Photo: Statista)

"It's not that India doesn't make money in general terms, it's that we don't make money as the 400 million people we do." You can do that 100 million people, that 40 million people, but Chinese entrepreneurs don't make products that target these two groups of people. Li Jian told the tiger to sniff.

Of course, big companies, such as Tik Tok, Helo and Bigo, "have been globalized since they were at sea, but no one in the Indian market alone has done a better job," says Mr. Ji, who targets the 400m so-called emerging Internet population, but it's hard to cash in. Bigo should be no problem or make money to survive. Li Jian said.

"It's really cheap to buy in India." But even if you own this traffic at a very low cost, companies won't make money and advertisers won't advertise to you, which puts most Chinese entrepreneurs in an awkward position:

If you do the first two levels of people, income may get up, but the scale will not come up. "But 400 million people's businesses, if they're all in the right way in terms of revenue, don't have such entrepreneurs at the moment."

In Li Jian's view, India's three layers of Internet people, consumption habits and income levels are huge differences, Chinese entrepreneurs in the product, the first thing to be clear is for what kind of people, want a product to cover everyone, that is basically the night sky. "What you're going to do, what you're going to push, what kind of revenue model you're going to have," he said.

And when that 400m people will be profitable, Mr Li says it will take at least 15 years, based on indicators such as consumption growth and disposable income at the bottom of India.

India is not the next China.

In Sun justTime machine theoryBecause of the different stages of industry in different countries, the current situation of developed countries can be used to bet on the future of developing countries, to take full advantage of the imbalance between different countries and industries. It is this "bad times" that has left people who have never set foot in India looking forward to the market, hoping that the internet dividend that erupted in the Chinese market that year will be repeated in India.

But will India really be the next China?

India is a strange market compared to China, with a more structure and development pattern than China, but more international than China. India's biggest e-commerce company is Amazon; the biggest search is Google; and the biggest social one is Facebook, which seems to be brewing a Silicon Valley-based ecosystem, but a closed caste culture has left entrepreneurs entering India unable to get a satisfactory ROI.

In real terms, India's economy grew slowly between 2006 and 2011, after which it grew slowly, meaning that India's own economy is not solid. India and Southeast Asia share a common feature: missing out on the PC Internet, so there is no such thing as BAT, but a direct transition to the mobile Internet era.

One fact that cannot be ignored is that India's current level of economic development is only equivalent to China's around 2004, and it is worth pondering whether India can afford to sink the market now, after all, in China, whether it is fast hands, water drop chips or dodo products, it is only after 2015 began to erupt.

And in India, an upwardly growing country, entrepreneurs seem to have a hard time finding real structural opportunities, despite the low cost of traffic.

"That's the main reason most entrepreneurs are pulling out of India." "It's really hard for small and medium-sized entrepreneurs to survive there unless there are investors who are willing to take advantage of the opportunity and burn money subsidies." An industry insider told the tiger to sniff.

But don't be too pessimistic.

Mr Lou said India's mobile internet population was still growing rapidly, with mobile phones often being bought as the first "home appliances" in India, and an Indian might have nothing but a smartphone.The release of the Internet demographic dividend has begun to drive India's supply chain, logistics, payments, consumption and other aspects of development.

Modi's government is also pushing the process, with UPI, the mobile payment system launched by India's state-owned payment company, making it easy for Indians to trade online(Note: Paying commissions is lower than in the U.S. and higher than in China)， GST(Goods and Services Tax)The reforms were The biggest tax reform since India's independence, combining central and local taxes, unifying divided tax administration and reducing friction between the indian states over consumption, economy and taxation.

One investor, who did not want to be named, said the Time Machine theory could not be used simply to use the Indian market, arguing that what happened in China would be replicated in India, oversimplification of perceptions of the local market.

India's business environment is more complex than people think, with a more dynamic view of the country's future.

"Mature enough, sensible entrepreneurs and investors will not have such naive ideas about the Indian market and will be more cautious in taking action."

End

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