Chinese officials have started invoking their 2008 anti-monopoly laws to probe local business practices by U.S. technology companies. The consequential soured business environment is one of the reasons that San Jose, California based Adobe Systems Inc. has declared that it will close its R&D center in China.
Other concomitant factors for this closure include rampant software piracy in the country, as well as the company’s shift toward a cloud-based software-as-a-service business model and away from one-off boxed sales of software and licenses.
“Adobe’s presence in China will be focused on market development activities moving forward, and it will be dissolving and closing its research and development branch there,” the company said. “Adobe will maintain its sales presence in Shanghai, Beijing, Guangzhou, Shenzhen, Hong Kong and Taiwan.”
November 19, 2014 No Comments
On November 6, at the Barclay’s Asia Forum in Hong Kong, Nouriel Roubini, professor of Economics at the Stern School of Business New York University, and co-founder and chairman of Roubini Global Economics LLC in New York, spoke about a role switch in the economies and policies of India and China.
Roubini opined that the economic growth in China would fall to 6.5% in 2015 and below 6% in 2016 due to the aging population of China, and also because of the investment-driven economic model followed by Beijing. China’s banks continued to face increasing amount of bad loans because of credit-driven fixed investments in real estate, infrastructure, and excess manufacturing capacity. Besides, bad debts in the public sector were weighing the country down. Reforms that were announced by the Communist Party of China’s third plenum in 2013 were not being implemented, Roubini explained.
In contrast, with the right reforms, India would outpace China to record a 7% growth he predicted.
“So for the first time ever the tortoise becomes the hare and the hare becomes the tortoise,” Roubini said.
November 10, 2014 No Comments
Just five months after India prohibited the testing of cosmetics on animals, its Ministry of Health has issued new regulations banning the import of any cosmetics that have been tested on animals overseas. Issued as an Extraordinary Announcement in the official Gazette of October 13, this rule (known as 135-B) comes into effect on November 13 this year. By contrast, China requires most cosmetics and personal care products to be animal tested prior to being sold.
October 31, 2014 No Comments
Sequoia Capital‘s general partner, Douglas Leone is pleased with India. “We could not be more thrilled. We don’t have 25-30 category leaders in the United States; we don’t have [as many] in China right now, but we have it in India,” said Leone, whose fund has backed companies such as local search provider Justdial, restaurant listings service Zomato and data analytics firm Mu Sigma.
Interviewed in the Economic Times of India, the billionaire venture capitalist whose firm has backed Google, Apple, Tesla and Cisco said, “We are seeing startup companies [in India] growing just as fast as we’ve seen in the United States.” The fund expects to catch startups younger, pour more money into those already in the portfolio and sniff out the best deals in India’s booming consumer Internet space. Sequoia has backed more than 100 companies in India and since 2011 it has invested $800 million in the country.
Leone said that Sequoia took a decision to stay away from online retail in India, a business that requires large amounts of capital and where profits are hard to come by. “We think it is a big top line space, but difficult to figure out when it is going to be a big bottom line space,” he said about India’s online retail sector. Domestic market leader Flipkart has raised $1.2 billion this year alone and Amazon’s Jeff Bezos has pledged to invest $2 billion in India.
India is the “next land of opportunity for entrepreneurship” and Sequoia is looking to make the most of it.
October 29, 2014 No Comments
Consumer demand in emerging markets is getting affected because of weaker economic growth, in major markets such as Brazil and China.
But, according to Business Week, India could be a different story. “There are some things going in its favour. Economic growth seems to be recovering and inflation seems to be declining, particularly wholesale inflation. If the current trends continue, consumer demand should recover, especially in urban markets. Rural growth is subject to what happens to agricultural growth and may also get affected if the government actually cuts allocation to the rural employment guarantee scheme. Falling inflation is a big plus as it can improve profitability, or give companies leeway to spend more on advertising and promotions.
Therefore, India may resemble an oasis for consumer companies, relative to other emerging markets.”
The article goes on to say “Overall, Indian consumer companies seem to be in a better position because of the country’s improving macroeconomic prospects. While that is good for their earnings, it is also likely to keep investors interested in Indian consumer stocks. The BSE FMCG Index has gained 5.3% in the past three months and is trading at an expensive price-to-earnings multiple of 39 times. But that valuation may hold up if India can make good its promise of outperforming other emerging markets.”
October 28, 2014 No Comments