As a Chinese equity investment organization with industrial background, what kind of strategy is adopted in capital investment when entering foreign markets? What is the difference between the features of investment in China, America and India?
 

Recently, 36Kr and Wang Ying, Executive Director responsible for US market in Fosun RZ, and Tej Kapoor, Managing Director responsible for India market in Fosun RZ.
 

"Investors in Europe and the US that came to India enjoy watching the stock market, and only Chinese investors are concerned about the DAU,MAU of mobile apps.", Tej Kapoor told 36Kr, “Chinese speak the same language.”

The entire 2017 year, Fosun RZ Capital investment cases in the United States and India include: U.S. millimeter wave radar chip company Uhnder, insurance intelligent hardware company Roost, India's big data-driven consumer finance company Kissht, India travel search engine Ixigo.com , and so on. Positioning "Global VC investment platform" Fosun RZ Capital also launched Southeast Asia office in 2017 besides China, the United States and India in order to form “China+3” investment layout.
 

The following is the dialogue:

Chinese capital must have a unique position and value in the US market

36Kr: Fosun RZ Capital has exacerbated the global layout over the past year. What is the difference in the investment layout of the US market you are responsible for compared with the Chinese market? What is the competitiveness of Chinese capital?
 

Wang: Fosun RZ capital has our different emphasis on how to bet the Chinese and American markets. In China, we are concerned about a relatively broad runway, having research and investment in new consumption, finance, technology, health and other fields. But in the United States, Fosun RZ Capital focused more on the runway where we have a comparative advantage, and we want to bet on areas where we can add value to startups, and now the main choices are finance, health & medicine and artificial intelligence.
 

In these areas, we are still competitive enough. For example, Internet insurance: Fosun has a global presence in the traditional insurance business, and we have resources regarding regulation and market, and we also have the underlying Chinese market, which can give the start-up companies a lot of help. For example, we have invested in a Chicago-focused auto insurance company, Snapsheet, in the US. At first we found them voluntarily, because Yong’an insurance under Fosun Group also has related business of car insurance, as well as our insurance business in Portugal. From the communication with the entrepreneurial team, they can feel the foundation of our insurance industry, as well as have a relatively deep understanding for the business. In addition, they hope that Fosun RZ Capital can help them go out of the United States.
 

On the other hand, Fosun RZ capital, as a foothold in China's equity investment institution, coupled with our runway selection, in fact, has a certain particularity. Although China's capital has grown in recent years in the US, it is still a handful of active Chinese capital in the Bay Area, and many funds are focused on Chinese entrepreneurship. Instead, Fosun RZ Capital’s investment layout was centered with industry.
 

36Kr: What do you see as the reason why Chinese capital is increasingly looking for entrepreneurial projects in global markets?
 

Wang: Two reasons, one is that Chinese startups’ valuation is relatively high, the overseas cases have a relatively more reasonable price. The other is that real technological innovation still base in America. I think Chinese entrepreneurs are more adept at innovation in operations and business models, especially in the consumer sector. A lot of cutting-edge technologies are still in America.
 

In all, as Chinese capital invest in the U.S. market, we still want to provide a differentiated value. Because of our layout in the insurance and pharmaceutical industry, we have the basic of industry, and the foundation itself is cross-border. In artificial intelligence, we care about the problems that a start-up company actually solves through artificial intelligence technology. For example, in the field of automatic driving, life science and technology, finance and other applications. In addition, we will be concerned about hardware-related High-tech, because China is the world's largest hardware production base. In terms of productivity and market expansion, Chinese capital can bring them different meanings. For example, there is a company that makes smart phone hardware, and we are helping him reduce production costs in China.
 

36Kr: In the recent year, the domestic focus on internet finance has also turned from finance to insurance. In particular, how do you think the different trend of Internet insurance in China and America? What are the Internet insurance products that have potential in the future?
 

Wang: Insurance has great opportunities in both China and US market, and the biggest difference is in regulation. In terms of regulation, the United States is regulated by each state, and each state has a different degree of tightness. It is extremely difficult for a new company to get into the regulatory system and to sell products in every state. For example, the friendliest city for startups is Chicago, and New York and California are very strict. One consequence of this is that American Internet insurance start-ups are taking the MGA model, which is to work with traditional insurance companies to sell innovative insurance products using existing channels. China's regulatory system is strict, but regulation in some areas of the system is more flexible. From the product point of view, the comparison of Internet insurance can be divided into personal and business-related. Individuals include family insurance, car insurance, accidental death and health insurance, and businesses include small business insurance and health care insurance. Internet Insurance has several factors in the development of these products: First, demand is larger than market stocks, take accidental death insurance as an example, the traditional average insured amount is 0.2 million, but in the United States, generally in a family, male owners are the main source of household income. In case of an accident, the 0.2 million is not enough to pay home loans. Behind this, we can see the problem of product design and purchase process. Second, the millennial generation has brought new consumer scenarios for Internet insurance, where young people in the United States are no longer buying homes but renting, which changes insurance coverage from insuring the possession of goods to demand for tenure and short-term, high-frequency insurance.
 

Determined the type of products, I think, Internet insurance can also be innovative in the insurance sales, risk control, compensation, improve the existing capital gains. For example, in the process of risk control, we can make innovations on how to interpret data, or improve efficiency in the process of compensation etc.
 

"Chinese" investor who know more about Indian entrepreneurs

 

36Kr: In Mar 2017, Fosun RZ Capital participating in the ＄1500M USD financing of India travel search engine ixigo.com has received a lot of attention. What is the logic behind the investment?
 

Tej Kapoor: In India's Internet consumer market, tourism is one of the largest and fastest-growing industries in the market. Over the past year, online trading sales have exceeded the $20 billion, growing faster than 20%, where hotel bookings and airline bookings have grown more than the 30%. In terms of the number of users, ixigo.com can be regarded as the top ten internet companies in India.  Through the website and mobile phone users can book flight tickets, train tickets, hotels and so on. Ixigo.com has 1 million searches per month, and has served 1.5 billion internet users locally, where 14 million month active users transact and pay via mobile phone.
 

Before ixigo.com appears, if you look at the tourism market in India, you will find a lot of scattered sites for tickets, information and so on. The users’ demand for travel information, hotel reservations, ticket purchase etc. are far from satisfied. Ixigo.com is doing something like "Qunar" in China, which aggregates the traffic information that is scattered across various websites, such as tickets, trains and so on. You cando everything you need to do before travel using just one App.
 

From product perspective, the specific services provided by this team are also valuable to the local Indian community. For example, they provide train information forecasts through machine learning techniques. Every day there are 24M Indians travelling through the train. In the past, because of delay, oversold and other reasons, users who bought train tickets will be displayed in the waiting list for a week or even a month, cannot determine whether they can get on the bus, which caused a lot of trouble. The predictive information provided by ixigo.com now helps users make decisions about whether to buy train tickets. And the train application of the ixigo.com has been ranked first in India.
 

At the same time, the current Indian through the Third-party platform to make reservations only for the entire market around the 15%, many users are also hotels, airlines and other separate sites to make reservations, so ixigo.com future space is still very large.
 

In the future, their successful form on the train ticket is also smoothly copied from the train to the hotel reservation thanks to the entire ixigo.com team, where 70% is a technician. So it's not a marketing team, it's a technical team, and that's one of the reasons I have a good comment of  them. I think that they will certainly be able to be the first in tourism (in terms of the number of users, and it is not far from the first App MakeMyTrip), and they still have a lot space to expand in artificial intelligence, big data and even the breakdown aspects of tourism information.

36Kr: From the information you get, as an Indian internet company, why would ixigo.com choose a Chinese-backed capital institution?
 

Tej Kapoor: One of the major reasons is that China and India have great similarities in terms of land size, market size, demographic structure and economic development. From the development stage of the Internet, the current development of India is similar to China in 2010-2012. Now India is a "mobile-first Country", and some people even don't buy a computer, just use a mobile phone. I understand that China has gone through the PC era, but India has jumped right into the mobile age. Indian entrepreneurs are looking at how China has grown to today's leading position in the past decade, and the Chinese story has left a deep impression on them, while many successful companies in Europe and the United States have been established for a long time. You see, India's top internet companies have Chinese capital, not just because Chinese are rich, but because, compared to other countries ' investors, Chinese capital knows best what is happening in India. European and American investors came to India to enjoy watching the stock market, while only Chinese investors cared about the DAU, MAU for mobile apps. In the words of ixigo.com CEO, Chinese speak the same language.
 

On the other hand, compared to the U.S. and Europe and local capital, Fosun RZ Capital's restrictions on entrepreneurs are relatively small, we have always been an entrepreneur's ally posture. In terms of investment forecasts, Chinese investors will be more aware of where they are and more patient than investors in Europe and the US, after all, the story of Chinese internet start-ups has taught a group of Chinese investors.
 

36Kr: What are the reasons you joined a Chinese fund as an Indian when you joined Fosun RZ Capital in 2016?

Tej Kapoor: In 2011 or so, I worked in Nasper where I get exposed to some Chinese companies. The diligent attitude and strategic vision of the founders of Chinese enterprises brought me great shock. When I reached Fosun RZ Capital, I also saw a very young team, with an average age of about 30 and was full of energy. This is an entrepreneurial investment team I'm looking forward to. At the same time, China's past experience and lessons can be brought to India. So now investing in India is also the case, and each project Fosun RZ Capital will ensure that a Chinese colleague is involved because they have looked at similar business models. For me personally, this is also a good learning process.
 

If you go to India now, the best hotel has a lot of Chinese figures, even the hotels themselves provide very good Chinese food; Chinese-branded smartphones have the biggest share of the smartphone market in India, even more than Samsung; the founding team of Indian news app News Dog is from Beijing. In my opinion, the investment of Chinese capital in India will only be further developed, and now is only the beginning.
 

36Kr: What areas do you look for in addition to tourism?
 

Tej Kapoor: Fintech . In India, fintech is booming, even faster than China. Previously, opening a bank account in India was a difficult task, especially for low-income people. However, in 2013, India implemented the Aadhar program, completing the data collection for demographic and biometric recognition of more than 500 million people. In August 2017, it has entered data on the biological characteristics of 1.2 billion people. With this foundation, banks that once needed 2-3 weeks to open bank accounts just need ten minutes now. What’s more, in 2016, the Government of India abolished large denomination notes and promoted smartphones, Indians were gradually beginning to accept mobile payments. This provides a very good infrastructure for the development of fintech in India. People can borrow, lend, transfer etc. on the Internet, which left a lot of room for development of the Indian fintech. There is also a process of changing people's opinions. When I told my father that I wanted to buy a house through loans, he asked me, "Oh my God, are you a drug dealer?". His generation is unable to understand things like cashless consumption, consumer loans and mortgages, but now young people in India are slowly accepting these new things and this will be the basis for the development of the Fintech in India.
 

In addition, due to the input of the Amazon and Flipkart in the past few years, we believe that the consumption upgrade and logistics project will be the focus of future development. India's infrastructure is currently in a gap with China, but the middle-class population consumption is gradually rising. And in recent years, logistics distribution and warehousing needs are improving rapidly, so we believe that India's industrial growth path should resemble China. In the field of consumer upgrades and logistics, it will be combined with the unique local public sentiment, culture and policy, and the future will have very great growth potential.