Technology

Who are the Leaders in Chinese Internet Finance – Part 1 ?

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China Internet Finance - ReviewWe’d like to enlighten Entrepreneurs in India about the traction in the Chinese Internet Finance market and weigh their business strategies as many have achieved over 300% YoY growth in the latest quarter/month. This is as a result of (1) rising demand from younger generation of consumers, who are more receptive to purchasing with credit, (2) better designed product catering to specific usage scenario, and (3) improved system robustness, data integration and internal operation process to serve the volume pick up.

WeBank, founded in late 2014, is the first private internet bank in China. Company faces challenges from consumers. Tencent owns a 30% stake in WeBank. Weilidai Micro Loan – product was specially designed to optimise customer experience with an effective risk control system, based on multidimensional user

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Citrus – Payment Processing Platform With Difference

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Citrus Payment ProcessingCitrus is building a 360-degree digital financial experience across transport (air, taxis, etc.), essential payments (utilities, taxes, insurance, etc.), discretionary payments (shopping, entertainment, etc.) and eventually to consumer credit and social transactions.

Payments have two components: merchants and consumers and the idea of Citrus is to own the transaction between the two of them. Citrus offers a complete payments stack: payment process, business layer and checkout.

Citrus now processes 0.5 mn transactions a day amounting to Rs10 bn in sales a month. FY2016 volume processed was US$1.6 bn. This makes them the second biggest company

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How Big 3 Cloud Computing Platforms – AWS / Azure / Google are Stacked Up Against each Other ?

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AWS Comparison with Azure GoogleEvery industry / vertical has Big 3 companies like we have seen in the past from Automobiles to Software. When it comes to offering Cloud platform, Amazon leads the pack with AWS, Microsoft’s Azure is a distant second and Google is the clear #3. Time to Market and Investments helped Amazon launch Amazon Web Services in 2006 versus Azure and Google Cloud Platform coming on in 2010 and 2013 and Microsoft having since committed more heavily in the space than Google.

The path each company took is different as each player has borrowed from heritage and experience earned from their principal operations to establish their position in the cloud computing landscape. AWS is leveraging its massive scale and commitment

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How Enterprise Workload is Moving to Public Cloud ?

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Enterprise IT Moving to CloudWe believe Enterprise data center workload will continue a steady migration to the Public Cloud because the Public Cloud is more efficient, agile, elastic and is pay-as-you-go, and business users expect these characteristics from their IT infrastructure

Non-mission-critical workload in the Enterprise and SMB workload in general has been moving to the Public Cloud at a steady trickle over the past few years. While the wholesale embrace of the public cloud to run all workloads is still not very common in our view. We expect Enterprises to continue scrutinizing their data center workloads to identify more non-core and temporary workloads that can be moved to

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VC / PE Investors Strategic Look for Funding Startups

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ECommerce Investors Eye on GrowthTighter funding has led to exits, consolidation and focus on unit economics. However, those backed by strategic Investors / subsidiaries of overseas players appear better placed. Recent call with a leading private investor highlighted that GMV growth for ecommerce players will be under pressure in the near-term. This is being driven by limitations on marketplaces by new regulations to become compliant with 25% threshold sale limit from single vendor and reducing heavy discounts that were driving significant growth.

Management commentary of Amazon, Rocket Internet and Softbank over last 15 mths highlights diverging thinking even between strategic investors. Amazon/Softbank talk about market potential and plans for continued investing. Rocket Internet (for Jabong) has moved from market share to balancing growth/profitability to profitability now. In fact,

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Local eCommerce – Lessons for JustDial / Entrepreneurs from Baidu Local Express

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Baidu Local ExpressChinese Internet Giant, Baidu has had Keyword based bidding on the lines of Google AdWords for sometime codenamed as Phoenix which Local service platforms still find the bidding system complicated. In October 2015, Baidu launched Local Express, a new simpler marketing platform for local merchants. Its key advantages include:

  1. Ease of use of the marketing interface, without the hassles of choosing keyword price.
  2. Geo-targeting to customers within 5-30 km from merchants, making the marketing campaign more effective
  3. One-stop ad placement displaying across three key traffic platforms on Baidu: Baidu Mobile, Baidu Map, and Nuomi apps. In the past, Baidu search and Baidu Nuomi had separate marketing and services channels
  4. Infrastructure support. Merchants can rely on Baidu Nuomi’s landing page support, and do need to set up their own website.

Local Express currently targets eight local service sectors, including (1) cosmetics, nail polishing, manicure, and pedicure, (2) gym and yoga, (3) talent training, (4) electronics repair, (5) auto services, (6) photography, (7) moving and housekeeping services, and (8) plumbing services. These are also existing categories on Nuomi’s platform. We note that restaurants, KTV, and tourism, are not

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Just Dial Search Plus Monetisation Hit Hurdles, Omni ERP in Focus

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JustDial Search PlusJust Dial’s management has been talking about opportunities in “Search Plus” (hyperlocal transaction enablement) offerings for quite some time. Management has indicated difficulty in monetisation of Search Plus transactions. We also have concerns on monetisation of Search Plus, given the bandwidth necessary to manage a large number of offerings (over 25) and competition from several vertical specialist companies.

In the last couple of months, the focus seems to have shifted more towards its mini-ERP offering for small and medium sized merchants—JD Omni. JD Omni is synergistic in the sense that it targets the core classifieds business customer base (mid-to-small sized merchants) to a large extent. On the other hand, it represents a completely different business model for the company (a software product business vs the current listing services business). And the company’s ability to cope with this different business model has yet to be tested.

While there are several products

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Jabong Bid Adieu to Aggressive Discounting, Path to Profitability

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Jabong Path to ProfitabilityThe drastic QoQ improvement in Jabong.Com gross margins (900bps) implies that GMV (gross merchandise value) per transaction has improved by 22% to the highest ever even as revenues fell by 8% QoQ. Our reading is that cash-strapped or undingconstrained portals could witness reduction in revenues as they look to monetise the existing customer base with the convenience of range and shipping over pricing.

Jabong’s gross margins (500bps improvement in CY15) seem to indicate that discounting has reduced but operating margin of -49% in CY15 clearly indicates high customer acquisition and retention costs. While discounting on own inventory

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How is India Graduating towards Digital Money Society ?

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Digital Money in IndiaIn India, cash still rules. 41% of India’s households are unbanked and credit card penetration is a measly ~2% (debit card penetration is much healthier at ~33%). The situation is similar on the retailer side, where only

There are several trends/ initiatives (described below) under way that will transform the financial landscape in the country. Over the coming years, we are set to see a sharp rise in debit card penetration, a shift of banking transactions from offline to online, a greater adoption of electronic payments and greater use of mobiles for conducting electronic transactions. These developments present large opportunities for players operating in the broad mobile money ecosystem.

Pradhan Mantri Jan Dhan Yojna (PMJDY) – The long-term vision of PMJDY is to lay the foundation of a cashless economy and

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Indian Internet Companies Revenues Soar, Losses Mount

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Indian Internet Companies ProfitsAnalysis of recently reported 2015 financials of 22 unlisted e-commerce companies reveals some interesting trends: (1) these companies posted revenue growth of 191% yoy, with marketplaces leading the pack at 475% revenue growth (not GMV), (2) in most other categories (barring marketplaces), loss was magnified by high cash-burns from 1-2 players (for instance, housing.com in real estate). Several companies (general + real estate classified companies in particular) spent aggressively on advertising to gain traffic and market-share.

e-tailers is the only category where loss margin declined yoy (though loss in

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