The Indian startup that’s Made in China

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Art Courtesy: Pradeep Vijayan

In the first week of 2020, Robin Li, the CEO of Chinese search giant Baidu visited India for the first time. His aim was to scout for talent in the AI space and also evaluate how the company could build a footprint for itself in India. Baidu is one of the original tech giants to come out of China. Together with Alibaba and Tencent, this tech trinity is referred to as the BAT. All these names might not ring a bell for the average Indian, until you see how Chinese tech giants (including the latest entrant ByteDance – parent company of the wildly popular TikTok app) are steadily making inroads into the Indian startup ecosystem.

The Chinese Data Empire

In addition to the economic might these companies have in China, the BAT Trinity is also helping the Chinese government make sense of the tonnes and tonnes of data they collectively generate. Again, big Chinese companies using data to help the Chinese Communist government effectively convert the country into a surveillance state is not something we haven’t heard before. 

Another thing that ties them together is the fact that all these companies have investment arms that have billions of dollars of spare cash to splurge on up and coming startups. Alibaba for instance is a key investor in many Indian unicorns like Paytm and Zomato. Tencent has made multiple investments in leading Indian startups like Swiggy, Flipkart, Hike, and Practo. In addition to controlling the way these startups function in the long-term, large Chinese investors can also deploy their own tech ecosystem in these companies. A recent report in Economic Times had mentioned how Zomato had agreed to become a part of the ‘Alibaba Ecosystem’ to raise a fresh round of capital. 

An ecosystem herein could mean Chinese technology running on Chinese servers in the back-end with little or no oversight on what is done with the data that is generated by Indian consumers. Case in point is Paytm Mall which looks eerily similar to the leading Chinese ecommerce website called Tmall, that’s owned by Alibaba. As Indians we know that our Privacy Laws are far from perfect and this is only helping Chinese companies use startup investments as a backdoor to access data that can be crunched for their purposes, business and otherwise. 

Are you sure, you’re Indian?

Most of the unicorns in India are currently funded by Chinese investors and although the cumulative amount might look small, the long-term effects of handing over our data to the Chinese can have far reaching consequences. The average Indian might be least bothered about what the Chinese learn from his food purchases or clothing choices, but we need to also understand how technology platforms can be misused to spread fake news on the local level and maybe even influence election results on the international level.

Chinese investments are largely focused on the Fintech and Ecommerce sectors. Seeing that Apps or online platforms in these domains have widespread acceptance even in the smallest Indian cities, such investments can be used to harm India’s long-term interests. Indian startups need to work in India’s interests by looking at investment options that do not come from countries that have little or no respect for privacy, human rights and intellectual property rights. As consumers we need to be aware of the apps and online platforms we use everyday and make an effort to understand as to which ones are Indian and which ones look Indian, but are Made in China.

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