Indian firms should learn from China’s fintech experience: Paytm president
China’s rich experience in online and financial technology (fintech) sectors is a source of “good learnings” but Indian companies have to be smart and not simply “copy” what’s happening here, a top executive of the Indian digital payment company Paytm has said.
Indian companies need to be conscious of the differences between market conditions with China and adapt accordingly, Madhur Deora, Paytm president said.
“So, there are differences and you just have to be conscious of the fact that you cannot just copy what is happening in China…it won’t work. You have to be smart about what does it mean, why did it work in China, will it work in India, maybe there’s something that worked in the US that will work better in India. You have to be open-minded,” Deora said.
China’s e-commerce giant Alibaba owns a 46 percent stake in Paytm, and according to Deora, working with them has given the Indian company a chance to see what works in China and what doesn’t.
Alibaba has invested in the Indian company through its fintech arm, Ant Financial.
Deora said working with the Chinese company “…allows us to get high-quality learnings from China because we do not have to rely on an outside-in view of what’s happening here”.
Deora was talking to HT on the sidelines of the just concluded the 6th World Internet Conference in Wuzhen in eastern China’s Zhejiang province.
“So, if we see something interesting happening in China, we can sit with them and say, listen, what is the enabler of this, what is your (Alibaba’s) view of whether this is important, why is it important, when we look at it from outside, we see challenges for adoption, …how do solve (those challenges,” Deora said.
“What has happened in China (in the fintech sector) is very positive for society: More consumers who use financial services, more shopkeepers who use financial services, (and so) friction comes down. So the idea is that we should use some of those learnings to make sure that in India also fintech also moves rapidly.”
Comparing the smartphone markets of the two countries, Deora said: “If you look at statistics of smartphone users, India is probably six years (behind) or India is where China was probably six years ago but it is growing very fast in India”.
“It’s not to say that India will be at this scale six years from now. China had 400 million smartphone users six years ago, maybe seven years ago. But India is growing very fast…they are 400 million new smartphones, internet users in five years”.
In China, e-commerce is bigger than the US’s e-commerce now and has been for many years.
“In China, there are hundreds of millions, maybe half-a-billion e-commerce users, which is just not the case in India. So, that’s a major difference,” he said.
“Financial services are very different in China than they are in India. And, when we started, the number of merchants who accepted card payments in China was much larger than in India”.
“There are many differences. (But) none of them are really surprising, none of them are shocking. So, because China does have a higher GDP per capita than India does, so, none of these are shocking facts.”
“So, It’s just that how do you process what does that mean in terms of your business model, which is where some of the insights and in-depth learnings come from,” Deora said.