Recently there was a war of words on Twitter between two stalwarts in the field of financial services in India. One bemoaned the fact there is no home grown giant in the e commerce or social media field unlike in China such as Alibaba, Didi, WeChat, etc. He complained about lack of vision and support on behalf of government by restricting the entrepreneurs’ ambitions and also allowing overseas investors to take large stakes in domestic companies. The other gentleman countered with India being a capital deficit country, how no large Indian investors had an appetite for investing in such high risk ventures as also the fact that the government had no option but to allow foreign funds to come in.
In any case, this led me to think about why this is so, how did China come to create several Chinese-owned global e-biz giants such as Alibaba, Didi, WeChat, etc. while India doesn’t have any e-commerce businesses that operate beyond the Indian borders and in fact are now majority owned by foreign funds. What is the factor responsible for this – is it an entrepreneurial trait, government support, availability of risk capital, ability of Chinese people to quickly adapt to e-commerce, or any other factor? In fact, one would say it is all these factors and something more.
An idea of the Chinese mindset can be had by going back in history, in fact about 2500 years back. Around 300 BC, China was divided in to seven large states and several other smaller ones. Founder of the Qin dynasty Qin Shi Huang, fought hard and brought entire country under his rule in 221 BC. History shows that thereafter the Chinese rulers were never content with ruling parts of the country and constantly thrived to make sure that there was one single emperor that ruled the whole of China. There were over six China Wars of Unification. Contrast that with India as it continued to have multiple states, constantly warring with each other throughout its history of over 2000 years. Even when the Mughals arrived, large parts of the country in South and North East continued to remain under other rulers. It is only during the British rule that India as we know it today came to be under one single ruler.
In other words, this difference between China and India is all about dreaming big, aiming for the sky and never settling for smaller gains. The evidence for this is not confined purely to the internet businesses. Whether in energy, banking, consumer goods, electronics or commodities such as metals & chemicals, we do not have any global sized enterprise, barring Reliance Industries Ltd and Indian Oil Corporation. As per November 2017 global rankings, SBI did not feature among the top 50 banks, while China had as many as 14 banks in the ranking with the top 4 banks being Chinese. Creation of a global giant is not solely a factor of government support and is largely a product of personal ambition, risk appetite and relentless drive.
Nonetheless, any Indian who wishes to grow big on global stage feels the need to move out of India and take his businesses elsewhere. Anil Agarwal could not have built Vedanta if he had continued to stay in India nor would L N Mittal have emerged as the Steel King. There are too many restrictions and obstacles in path of an ambitious businessman to truly make it big outside India.