China ranks number 1 in terms of generating the highest gross domestic product (GDP) worldwide in 2016, followed only by United States (2nd) and India (3rd) consecutively. Given that fact, it pays to observe how China generally conducts their financial and economic activities in line with their achievement. When it comes down to it, China's huge venture capitalists (VC's) follow a safe and more pragmatic course of action - they pour their money on food and beverage enterprises.
As far as the Western perspective is concerned, the prestige of the Silicon Valley is still too big to debunk outright. However, new analyses indicate how today's high-end tech-oriented industry ultimately becomes tomorrow's dead investment.
The Chinese model prescribes betting billions on feasible low-risk enterprises. In an article published by Investopedia, Mainland China's investors are generally financing restaurant chains, tea chains, bakers and other related businesses.
Case in point: the IDG Capital Partners have provided an equivalent of $15 million funding for the chic teahouse chain called Heekcaa Lab. Clearly, they slowly moved away from their usual inclination of supporting tech startups. They have found a new capitalist vision - to build a Chinese rival for Starbucks.
Though this innovative principle seemed inconceivable for many, many American proponents have also seen the value of investing in food and beverage franchise. Compared to the popular tech-oriented industries, the demand for food and drinks are not only permanent but also high (regardless of economic recession or growth).
The world is slowly emulating China's sound financial practices. This reality should not come as a complete surprise. After all, China is the only nation in the world with the real potential to dominate the US market.
The current habits of China's unicorn VC's may serve as a good lesson for many investors worldwide who are caught up in the mythical draw of risky ventures.
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