As companies are experiencing a downturn in their domestic market, now is the time to look overseas.
"Times are too quiet for us to look at new markets at the moment" I hear business owners saying. Rubbish! The same people who were saying "We are too busy to look at overseas markets" 18 months ago! NOW is the time for action, unless procrastination rules!
Which markets hold most attraction? I have been a champion of India for many years. Why India? There are many reasons.
First, and I consider highly important, India has a legal system that was pioneered by the British. Therefore contractually India can be understood by Western companies.
Business language is English. India has many native languages, and a Tamil can only converse with a Gujurati in English. Indian TV carries UK & American programmes across the sub continent.
The Indian economy is the 4th largest in the world with a GDP of over US$3310bn. It has consistently experienced a growth of 8%. Practically every manufacturing and service sector is represented.
Unlike China, India has a controlled growth, rather than a 'boom strategy'. This has led to a business base that has ridden the recent recession well. All the points mentioned so far favour India over China.
The population of India is over 1 billion, of which over 40% are consumer driven. That is a consumer population of 7 X that of the UK! Like in Europe, washing machines, cars, dvd players, iPods, cell phones & laptops have become the norm, not the exception. 10 years ago, only 33% of the population could consider themselves as consumers in the true sense. No doubt today's 40% will become 50 and 60% in the foreseeable future.
Academically the Indians are well educated and dedicated. Many sought academic qualifications in the UK and USA, but the Indian Education system & academic deliverance is first class. As a result of the highly skilled labour, cutting edge industries like biotech, aerospace, sophisticated electronics & advanced communications are abundant. Technology centres such as Bangalore, Chandigarh & Hyderabad have International reputations.
A common misconception is that products will be copied as soon as they arrive. Contrary to this, Intellectual Property law is enforceable in Indian Law, and plagiarism is just as rife in Europe.
Another popular myth is that the Indian market will not withstand the pricing of my product. Again, with the buoyant and growing middle to upper income classes, pricing at European levels can be acceptable. And those products that are highly price sensitive can be manufactured under license or JV with low overheads / labour costs.
So how do you go about getting into this market? In the UK there is help from UKT&I (
) alternatively join one of the many trade delegations that have qualified and experienced chaperones. There are those who try it alone. It can work, but without local knowledge and on the ground support, it can be futile, frustrating and very expensive.
Those considering such an approach should budget around £4,000, and look for a programme offering a 10 day tour, covering different locations (three is normally sufficient) ideally offering qualified meetings and presentations arranged, with on the ground support. Some offer ongoing tailored local support, provided during the formative stages by professional businessmen. And in some instances, grant assistance can be arranged via local development agencies, or UKT&I. In addition local Indian Government agencies offer incentives for job creating ventures.
Joint Ventures, Distributors, Acquisitions, Mergers, Licensing arrangements, Investments, are just a sample of typical business arrangements, familiar to most businesses.
India has a lot to offer, particularly for those wishing to create new customers and provide real growth in bottom line earnings. So, what is keeping you?.......
Ian Thomas FInstIB
ian.thomas@sgba.co.uk
http://www.sgba.co.uk
+44 (0)23 9264 0589
