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doing business in india

Friday 29 April, 2011

Walter Vieira was back in town as a guest of the British American Business Council & Organization of Women in International Trade @ this event AN INFORMAL DISCUSSION ON CHALLENGES AND OPPORTUNITIES IN INDIA  I wrote about Walter’s last visit to Chicago Indian consultant’s take on India & he certainly does know marketing in India.  Here’s the presentation he gave Doing-business-in-India which can also be found here.  Here’s what Walter had to say in addition to what’s contained in the presentation:

India is a land full of contradictions: growing companies are energized, while lazy city workers leave the streets dirty.  Power plants are highly efficient, while Indians are inefficient in cleaning the toilets.  Multinational companies need to be in China &/or India as the 2 of them combined comprise 2/6 of the world’s population.  When entering India, there are 3 issues to consider

  1. is there a need, but no market?
  2. is there a market, but no customers (because of corruption) ?
  3. are there customers, but you’re not able to reach them with the right salespersons, distribution, etc.?

India has many different varieties of vegetarians, & the lowest prices @ McDonald’s restaurants in the world.  Dominoes Pizza changed their delivery deadline to simply anytime before the next meal.  Interestingly Indians keep their water glasses on their left so that they can eat food with their right hands.

8 Indian companies are listed on NASDAQ & the UN says India will become the world’s 3rd largest economy in the next 5 years. Inflation in India is really ~20%. Mobile communications is changing the face of India as 3.1M Indians start new mobile phone subscriptions every month.  Walmart is keen on India as LG & Samsung from Korea have done well there.

Recently the size of India’s middle class exceeded that of the poor, either of which is larger than the population of the US.  Literacy in India is defined as being able to sign your name, so literacy statistics are overstated, according to Western definitions.  There are 1400 major infrastructure projects going on right now in India.

Q&A

  • corporate social responsibility is becoming the flavor of the day in India, as it’s become a part of annual reports.  The government encourages firm to donate 2% of their profits, but legislation won’t help.  Tata donates 95% of its profits to charities.  2nd level institutions start schools/colleges, give away smaller %’s, & label everything for the branding.
  • There is a plan & eminent domain will prevail in building highways & infrastructure like the highway from Delhi to Mumbai, even though democracy & religious sensibilities (must build around temples, mosques, etc.) get in the way.  Dwight Eisenhower got the idea for national highways from Hitler’s Germany, & Ike met lots of resistance to supporting them.  But India has no Ike-their president is simply an honest man presiding over a bunch of crooks.
  • India’s relationship with China is complicated.  The Chinese have the advantage of being in a dictatorship that provides strong leadership, which always rules, regardless of the system.  India’s democracy requires education & literacy, but this makes for slow decision-making.   India is leasing a region in it’s northeast to China for 20 years for them to clean it up & then return it.
  • LG & Samsung have been successful in India because of , unlike Americans, their lack of arrogance.  They probed for the needs of the Indians & then reoriented their products to meet those needs.  To contrast, an American Kellogg’s executive questioned whether there was a “market for cereal in India.”  They thought “We taught the Japanese in 4 years, so it will take 7 in India.”  That CMO was recalled in 3 years, & the successor had success promoting cereal as a healthy mid-morning snack with vitamins.
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