Doing business in India – a country which the economic pundits say will be the world’s second-largest economy by 2030 (with China top and the USA pushed into third place). Going back a decade or so this assertion might have seemed nothing more than a fantasy, but everybody now seems to agree that India is finally going places. With a rapidly growing population of 1.3 million which boasts a vibrant middle class and a demographic which is heavily weighted towards youth, the potential of India seems almost limitless.
In the past, many developed economies saw India as a destination for the low-cost outsourcing of back-office or R&D-type functions and, whilst this area of the economy continues to thrive, India needs to be viewed in a very different light these days. India is, quite simply, the world’s largest potential market for goods and services. Where China has already developed much of its infrastructure and service economy, India still has enormous work to do. Look around on the streets of Delhi, Bangalore or Chennai and the need for development is obvious – move into the second or third tier cities and this need becomes even more acute.
What does all of this point to? Opportunity. India is a land of endless possibility where the people are aspirational, energetic, open and eager for progress.
So, what is your corporate strategy with regard to India? Don’t have one? Well, it is high time you started to put one together. We have worked on many India projects and here are some key areas we feel you need to focus on when looking at India as a potential market.
All of the major India-based outsourcing projects we have been involved with have thrown up enormous cultural challenges. The underlying factors which drive Indian business culture are deeply rooted in the country’s religious, societal and ethnic past. Clients are often fooled into thinking that because Indian’s often speak good English and because the country has a western-influenced history, that the cultural challenges they might face will be minimal. Nothing could be further from the truth.
You simply cannot hope to succeed in India unless you gain a very good understanding of the local cultural landscape. Some of our clients come to us at a very early stage of their India journey and ask us to run an India cultural awareness training program to help them work effectively in the Indian environment.
The biggest mistake organizations make when looking at India as a market is that they fail to do adequate research. To say that India is enormous would be a massive understatement. A country with 1.3 billion people, multiple languages, ethnicities, climates and geographies cannot be approached as a homogenous unit. You can’t really have an ‘India strategy’ – you probably need multiple India strategies.
The first question has got to be is: ‘Is India the right market for your products or services at this stage of your development, taking into consideration the current needs of India?’ This is not an easy question to answer. So many factors come into play when addressing this – what is your price point, and how does that sit against the competitive landscape in India? Who are your major competitors and how are they faring? Can you afford to invest in India knowing that the returns might not accrue for a number of years? Which city or region would be a good starting point?
All of these questions need answers, but good quality information is not always easy to come by in India. You will need to engage people on the ground in India who can really get under the skin of the local market and get back to you with honest, trustworthy answers to key strategic questions. Don’t convince yourselves you can do all your research via a laptop back at base – you quite simply can’t.
India is full of really great potential employees. On the whole, Indians are well-educated, ambitious, enthusiastic and motivated. Lack of local talent definitely isn’t the issue; finding and retaining good people though can be very difficult.
The Indian employment market is very fast-moving. Indians are always on the lookout for ways of improving their career prospects, job titles and income. How are you going to convince good people that you offer them a bright future? Why should they join your company when there is a myriad of opportunities for the type of people you are looking for?
The recruitment process can be very complex, and you need to be ready to move very quickly once you have identified the right candidate. Hesitate for a few days while you seek approval back home and the likelihood is that your ideal hire will have accepted a role elsewhere in the interim.
Job titles or ‘designations’ are incredibly important in India. Job titles reflect where a person is in terms of societal and family recognition – they can even impact on your ability to raise a loan. If you insist on keeping your job titles in India in line with how they are ‘back home’ you might find that you simply cannot get people to accept the position.
Not all Western professional advisers really ‘get’ India? Do yours? If they say they do, what depth of experience do they actually have of successfully advising clients on complex India-related matters? You need to dig into this.
You might find that, as far as India is concerned, you need a whole new set of accountancy, tax, legal, HR and recruitment advisers. There are lots of really good people who regularly give great advice to people who are entering and developing the India market – you need to make sure that these are the people you are talking to because there are also many people giving very poor advice where India is concerned.
Adapt to the Market:
Lots of companies find that, although there is a huge potential market for their product or service across India, certain adaptations need to be made so that everything really is ‘fit for purpose’ in an Indian environment. The changes you need to make might be very minor or they may be significant but before you attack the market you need to do sufficient research to enable you to act. This is another area where quality, in-depth research is invaluable.
India is vast and has multiple climatic and geographic differences. Think of India as a continent – would you address the whole of Europe in exactly the same way? Would you expect Swedes and Greeks to respond to your offering in a uniform manner?
One Size Doesn’t Fit All:
Do not just take your successful China strategy and think you can apply it piecemeal on India. India is a unique, complex and varied country which needs to be approached accordingly. Start with a blank piece of paper, determine your objectives and work back from that – forget the ‘cut and paste’ function.
In fact, the approach you successfully apply in Delhi might not even work that well when you move down to Bangalore. All of this might sound very complicated, but India is complicated. It is also soon to be the third largest economy in the world and cannot be ignored simply because it isn’t easy.
Things don’t always happen quickly in India for several reasons. It is important to understand how important it is to build deep, long-lasting personal relationships with potential partners, employees or clients. Indians want to take the time to get to know you before deciding to business with you – in fact, I’d be wary of anybody who wants to jump straight into a relationship. Relationship-building takes time, patience and funding. You can’t really circumvent this process and you need to engage in it with willingness and sincerity. You will eventually reap the rewards.
Not only will you need patience, but you will probably also need investment and cash flow. Return on investment might take longer than you originally planned, and you will need the financial courage to stick with it for the long-run. (You might also at some point need the courage to decide that your India venture just hasn’t worked…).