Alibaba and the 40 founders from India

Chinese may understand Asian business models better, given a shared culture, reports Tech In Asia

If you happened to be in Hangzhou on a crisp spring morning in late March, you would have witnessed an unusual spectacle: two busloads of Indian startup founders arriving at Alibaba HQ, posing for group selfies, and taking a guided tour of China’s biggest internet success.

The entourage consisted mainly of startups from the portfolio of Blume Ventures, one of India’s earliest and most active seed-stage funds. They were accompanied by both the co-founders and managing partners of Blume – Karthik Reddy and Sanjay Nath.

If not now, when?

Karthik and Sanjay founded Blume in 2010 after connecting as fellow Mumbai angels. They had a lot in common: graduating from premier engineering colleges IIT Roorkee and BITS Pilani, going to the US for MBAs at Wharton and UCLA, working for US multi-nationals like American Express and IBM.

It’s only recently, with the domestic market getting saturated and hyper-competitive, that the Chinese have looked over the Himalayas separating the giant neighbors that account for a third of the world’s population.

Question of trust

The main barrier is trust, due to a lack of connections and unfamiliarity with the market. Despite the potential, there are few proven successes in building a sustainable business in India’s consumer internet space.

Different from the US

The Chinese may understand Asian business models better, given a shared culture, especially in the price-to-value effect on consumers. They can take a different view from Valley investors, benchmarking Indian companies against similar ones in China to gauge their potential.

But sometimes that benchmarking can be misleading too. Although the two neighbors have similar demographics, they are on a different plane economically – China’s economy is five times that of India with four times the GDP per capita. An Indian startup can look like a poor cousin when measured against the cost structure and market potential of a Chinese counterpart.

---

This is an excerpt from the aritcle published on Tech In Asia. You can read the full article here