Growth is slowing down in the EU, the US and China are busy with each other and European companies are struggling with enormous personnel shortages, especially ICT and technical people. Time to look across the border for new growth markets and smart solutions to our personnel problem. Three reasons to keep an eye on India:
- India Is One Of The 5 Largest Economies In The World
India’s economy is still described as a ‘developing market economy’, but is now ranked in the top 5 of the largest and most influential world economies. The country’s GNP is around $2.6 trillion and the current government is working towards a GNP of $5 trillion by 2024. India is simply too big to ignore any longer.
- Made In India, The New Manufacturing Country
The manufacturing industry is growing rapidly in India. Not surprisingly, India’s Prime Minister, Narendra Modi, launched the ‘Make in India‘ program. The program was launched when he took office five years ago. Large sums of money were invested to put India on the map as the world’s new production hub. Under the Make in India program, foreign companies in over 25 sectors benefit from attractive tax breaks.
It is convenient for India that labour costs in China are rising and the trade war with the US is flagging up. It makes India’s maps even stronger. Manufacturing companies from all over the world are also noticing this. GE, Siemens, Toshiba and Boeing are just a few of the thousands of foreign companies that have opened production sites in India in recent years. They benefit from the abundance of technical personnel and also have access to a huge market for their products made in the country. Those who produce in India can serve the internal market better and cheaper.
- Spread Risk
The growth engine of the European economy exports. European exports are under increasing pressure because of the trade war between the US and China, Brexit and an overall slowdown in the global economy. It is not for nothing that ING advises that companies should open international branches in order to continue to benefit from economic growth across borders. The question is where to go? The EU, US and China are obvious, but they are also highly competitive markets. For many companies, there is still a world to win in India, a market with healthy and constant economic growth. So it is high time to start investigating India.
What is your India strategy? These are your options.
Your company sees opportunities in India. Not only as a potential market of 1.3 billion consumers but also because there are options to make your production process cheaper and more efficient. But what do you have to take into account to make a successful start in India?
- Invest With A Long Term Vision
India is a subcontinent with many different cultures, languages and therefore customer needs. It is therefore essential to have long-term planning and a lot of patience when entering the Indian market. Most Western companies that have made a successful start in India in recent years, by relocating their production or opening a trading office, only really reaped the benefits 3 to 5 years later.
- Define Success
When you enter a new market, and specifically the Indian market, you need to define your goals and (real) financial expectations well and solidly substantiate them with data. It sounds a bit obvious, but we still see a lot of companies leaving the market prematurely because they start with a too loose idea of what success in India means to them. Firmly defining your goals helps you to realize a good starting budget that can handle the biggest surprises.
- Smart Start With Low Cost
For many companies, finding a reliable business partner or working with a distribution partner is the best start. It is wise to start with a business incubator to become sure that India is the right market for your business. This gives you the opportunity to explore the market without immediately setting up a business and incurring the associated costs.
Whatever you choose, the form should feel like a natural extension of your business and bring in the right local market knowledge. This helps you better understand the complexities of the market and take the first hurdles during the start-up period.
- Recruit The Right Sales Managers
It is important to have the right people in the team. It becomes more important when you are in an unknown market. If you want to be a success story in India, you need people who know your product, who can build good relationships with partners and customers and who understand the local market. But where do you find those pearls in a country you don’t know? Collaborate with a reliable partner who has experience in this field and can support you in recruiting the right people.
- Choose The Right Distribution Partners
India has 28 states and is almost as big as the European Union. How are you going to sell your products there? And more importantly: distribute quickly and efficiently? You’ll probably need regional wholesalers to help you further distribute your product to the addresses of the local sales. Finding the right distributors takes a lot of work: background check, verification, making appointments. Each of these steps is essential.
For example, many foreign companies do not know how many distributors they have to deal with to cover India. A local advisor with a good understanding of your market and experience in shipping your product can help. This is an important step that often results in a successful start in the Indian market.
- Don’t Forget The After-Sales
The key to success in the Indian market is to offer a customized product or solution and a solid service network. In India, you will always have to compete with cheap producers from China. But for this very reason, you will have to distinguish yourself with excellent service. European products are much more qualified in India.