India needs a new Gandhi to fight Chinese digital colonisation
Chinese companies continue to secure and store the largest amount of consumer data from the world's fastest growing consumer market - India.
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On the fateful day of May 20, 1498, Vasco da Gama, the first European sailor to land in India, presented himself in the South Indian court of King Zamorin in Kozhikode. Gama presented the Zamorin with "four cloaks of scarlet cloth, six hats, four branches of corals, a box with seven brass vessels, a chest of sugar, two barrels of oil and a cask of honey. The gifts failed to impress the Zamorin who refused to trade with him since there was no gold or silver presents from Gama (sic)".
Territorial and political colonisation
The next four centuries saw brutal conquest, destruction and looting led by the Portuguese, the Dutch, and then the British targeting India and other Asia-Pacific countries. However, it was the British East India Company (EIC), formed in 1608 with a Royal Charter from Queen Elizabeth 1 of Britain, which eventually colonised the whole of India after establishing its first Indian transit point in Surat in the state of Gujarat.
Coincidentally, Surat is around 620 kms from the other famous port city of Porbandar where the man who was destined to lead the struggle for Indian independence from the British Empire, Mahatma Gandhi, was to be born in 1869, some 261 years later. After securing an agreement in 1615 from Indian Mughal emperor Nur-ud-din Salim Jahangir to set up factories in Surat, EIC fast-tracked its trading activities in India, establishing trading outpost in Chennai and securing customs duty exemptions from Mughal emperor Shah Jahan in 1717.
But by 1750 after the Carnatic war victories, the company's focus firmly shifted from trade to territorial and political control of India, with its capital in Kolkata. And this was not too far from where another nationalist Indian leader Subash Chandra Bose was born in 1897. But by 1803, at its peak of trading in the territories controlled by them, EIC had an Indian trade revenue of around £13.5 million, which in today's value is around £1.4 trillion. This was supported by an army of around two hundred and sixty thousand men. In 1858, 11 years before Gandhi was born, the EIC transferred all its assets and liabilities including all of its Indian territorial powers, armies, and recurring revenues to the British Crown and thus India formally became the single-largest and the most profitable colony of the British empire until she won political independence in 1947.
The indigenous rulers under the tutelage of Queen Victoria, the Empress of British India, collectively known as the princely states, entered into a subsidiary alliance agreement with the Queen for military protection from rivals.
This is the historical summary of the colonisation of India, the largest and most profitable colony of the British Empire, which delivered bumper returns to the crown compared to other colonies such as New Zealand and Australia.
Clearly the path to colonisation was trade garnering India's precious metals, spices and opium in exchange for the crumbs of "souvenir type rarities" from Europe and military security for India's disintegrated princely states. The end game was territorial, political and governance control over its colony for precious resources to trade in the global markets.
Digital data as a commodity
History is repeating itself with a minor change in the trading context. Digital data is arguably the most precious commodity traded in the world market. This commodity packet contains individual's personal data that could be easily converted to consumer profiles. Such consumer profile information in today's interconnected world is more valuable than gold and platinum. Products and services can be better targeted using the information on consumer needs, including the affordability of consumers to purchase those goods and services.
Consumer profile information in today's interconnected world is more valuable than gold and platinum. (Photo: Reuters)
She who knows her target customer intimately is the queen, praise her, and she who is connected to the end customer through the Last Mile Connect (LMC) on the value chain from production to distribution of goods and services is the Empress, salute Her Majesty with curtsy.
India with a current retail consumer market size of around $800 billion is the fastest growing market in the world and is estimated to grow at a compound annual growth rate (CAGR) of around 8 per cent. India is also the youngest country in the world and the average age of her population will be around 29 years by 2020. It is also the fastest growing internet market in the world, and more than 450 million people are using a wireless device such as the mobile phone to access the internet. The e-commerce market — consumers purchasing retail goods and services through internet access — is growing at a phenomenal rate of 30 per cent. India currently has around 600 million smart phones in use, and these wireless devices are Indians' primary devices to access the internet.
This is the trading context of the new wave of colonisation facing India. Let us explain why it is so.
First the statistical background of digital colonisation. The major American firms to launch in India in the last two decades include Myspace, Facebook, Google, Twitter, Instagram, Amazon, and WhatsApp. Information about unsuspecting users — Facebook calls them connected communities of 320 million people in India — were sold to advertisers to target a range of products and services. With little or no regulation on data privacy, and with a unique Indian culture of welcoming all and sundry to our country, India and not China, became the largest source of data.
Then came the Chinese!
Forty-six out of the top 100 mobile applications (Mobile Apps) used to consume goods and services through internet access including social media and entertainment (M&E) are developed by China and hosted by mother servers located in China. This means the top 46 consumer data collectors through mobile applications are Chinese companies, followed by American companies such as Facebook and Google, who can trade the consumer data as commodities in the international markets. But in the case of Chinese companies, all of them are directly or indirectly controlled by the Chinese state government, like the EIC controlled by British empire, until EIC transferred all its assets to the British Crown back in 1858.
In 2018, TikTok, the Chinese developed M&E application, replaced WhatsApp as the most downloaded mobile app in India. The number of mobile devices accessing internet in India is expected to reach 750 million by 2020, and the consequent customer data available to mobile apps like TikTok at zero cost is rich in content. Unlike China, India as the largest culturally diverse liberal democratic country with 23 odd different languages has the most diverse and valuable data commodities.
What is farcical about these statistics is that India continues to pride herself as the software superpower in the world as China emerged as hardware production hub of the world. How did the Information Technology and Telecommunication (IT&T) software titans such as Tata Consulting Services and Infosys miss the opportunities to develop innovative mobile applications to prevent Indian consumer data from going in Chinese hands? While China successfully checkmated the entry of American data traders like Facebook and Google by establishing home-grown social media and search engine companies, successive Indian governments - both state and central - rolled out red carpets for companies like Facebook and granted them the opportunity to quickly garner the most valuable commodity- the Indian customer data profiles.
In 2015, Facebook lobbied the Indian government and came close to securing net neutrality regime in India and making sure data collection of small home-grown mobile applications developers would also go through Facebook gateways. The new age colonisation threat from China through its digital data commodity trading capability in the world's fastest growing consumer market got scarier. In 2018, two out of three smart phones sold in India were manufactured in China.
Facebook lobbied the Indian government and came close to securing net neutrality regime in India, in 2015. (Photo: Reuters)
This means around 400 million smart phones in India are continually dispatching data to their respective manufacturing companies' servers in China. Smart phone technology has so advanced that even when the devices are not connected to any mobile network or internet, the manufacturing companies' servers are connected to the devices manufactured by them through a unique digital identification number assigned to every wireless device.
Chinese digital infiltration
So, Chinese companies are continuing to secure and store the largest amount of consumer data from the fastest growing consumer market in the world. If one recognises that digital data is the most valuable commodity in the world market since it has the power to change governments and bring immense commercial gains to data traders, the theatre of Indian digital colonisation is well and truly in action. The power of digital data has been undeniably proven as the mightiest nation in the world, the US is grappling with its investigation on how Russia used digital data to influence the outcome of the last presidential election in that country. Chinese digital infiltration into other former British colonies like Australia has been alerted by politicians and academicians.
Andrew Hastie, former captain of Australian Special Air Service (SAS) regiment and now Federal Member of Parliament on the government benches and head of Parliament's Intelligence committee, called out China's military expansion plans in the pacific and urged Australians to think differently about economically liberated nondemocratic Chinese government. Hastie wrote: "Our greatest vulnerability lies not in our infrastructure but in our thinking." Yes, Asia-Pacific needs a new Gandhi and geopolitical alliance to defend the digital colonisation of the region.