Ecommerce In India

Experts see India’s e-commerce market at an inflection point. A recent Morgan Stanley report titled “The Next India” said Indian e-commerce would expand to $100 billion in revenue by 2020, from $2.9 billion in 2013, making it the world’s fastest-growing market...... Ant Financial, an Alibaba affiliate that invested $575 million in January for a 25 percent stake. .... Paytm has 20 million active wallet users (compared with 190 million for Ant Financial’s service Alipay, China’s largest) and aims to quintuple this by 2016. Some experts predict that mobile wallet users will overtake credit card users in India. ..... For investors in Indian e-commerce, China’s growth provides evidence that the scale is real and achievable ...... As in China, India’s smaller cities and towns lack retail infrastructure. In 5,000 cities and towns, tapping an app is the new equivalent of a visit to the mall, and it could unleash pent-up demand for the latest fashion or the newest device. ..... India resembles China of seven to 10 years ago in its broadband Internet growth, creation of digital-native marketplaces and rapid user adoption. Even ideas like online grocers, which have just started to gain a foothold in places like Silicon Valley could do well in India. ..... “So investors who won in China are playing in India. Those who missed in China, too, are playing in India. This is the land of opportunity”

The Next India

India’s new government has the strongest mandate in 30 years to deliver reforms ..... The government’s reform agenda must rein in corruption and streamline the regulatory and bureaucratic complexities of doing business so that foreign and domestic investors can feel more confident. If successful, growth in labor, capital and technology in tandem can power productivity and industrial output in ways that are simply not possible in Reform Club peers such as Japan, South Korea and China. For example, new capital can fund technologically advanced factories that can hire relatively inexpensive labor, assuring a market advantage in terms productivity, cost base and quality of product. ....... Over the next 10 years, India will contribute an additional 124 million people to the global labor pool, accounting for nearly 25% of the increase in the world’s working-age population. Economic growth that creates better-paying jobs can transform this youth demographic into a rising middle class, which will also be better educated, more aware of information technology and better able to take advantage of globalization trends.

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For China To Achieve Double Digit Growths Again

GDP per capita China 2002 (Photo credit: Wikipedia)

Massive political reform is necessary. A country that represses free speech can not beat one that celebrates it.

China’s Innovation Success Depends on Political Changes

Since 1978, the Chinese economy has seen phenomenal growth. ..... the country has grown by relying heavily on investments, exports, and its huge low-cost labor force. That formula has worked well so far, but evidence indicates that China is getting less and less from this approach lately. The country’s export growth is decelerating quickly, and China is already investing an amount equivalent to about half of its GDP—which is probably the highest level ever among any country in peacetime. ...... changing the country’s strategy so that its growth wastes less energy, requires less investment, and is less reliant on exploiting cheap labor as a competitive advantage. .... a transition out of the rapid growth model of the last three decades will be fraught with technical uncertainties and political complexities ..... The factors that drive a country to grow when its GDP per capita is $500 are totally different from the growth drivers when a country has a per capita GDP beyond $5,000. At $500—which was the case in China in 1994—you can copy the technology and production methods of other countries and drop them into your economy. ..... As a country gets richer, its growth formula changes. Innovations, technology, and productivity improvements become more important, as do domestic entrepreneurs and innovators. ...... Professors in China are like company employees, in contrast to their fiercely independent counterparts in the West. Research projects are often directed from the top down rather than being initiated by professors and researchers. Data sharing is difficult across bureaucracies ...... the huge export markets in Europe and the United States—is shrinking on the demand side. ...... technology-based growth drivers require more than simply copying other countries’ technology and business models. They require a rule-based system, IP protection, freedom to think and challenge authority, and a government with limited reach and power. In other words, they require Western institutions.

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