Interview with Mark-Werner Dreisörner | Relationship Manager | Deutsche Bank AG, Bengaluru
First published M+V Newsletter, September 2013
M+V: Currently, India catches attention through negative media coverage (warnings about the “Super-Indian”, “Nightmare India”). Do you share this assessment?
Mark-Werner Dreisörner (M.W.D): Business in India is challenging without a doubt. The selection of the right business partners is of utmost importance – even more so if it is to be for the long term. It is one thing to settle an argument over a single transaction with a client, but it is another to exit a big investment and split up with a joint venture partner. It is, therefore, advisable in any situation to put as much of an agreement into writing as possible. Still, legal cases may take years until the court reaches a decision and the costs incurred over the course of time may be immense.
M+V: Can you come up with reasons why “doing business in India” is still important today or maybe now more than ever?
M.W.D: Even though India’s fundamental macros are under pressure, Deutsche Bank believes that India will see a modest cyclical growth recovery in the financial year 2013/2014. Much of India’s long-term growth potential stems from the sheer size of its population of 1.2 billion people. The development of the country’s middle class has just started but in purchasing power parity terms, India is already the third largest economy at US $4.5 trillion. Rapid urbanization will create demand across the board.
The middle class, estimated to be 100 million to 300 million people strong, has buying power unmatched to any growing nation. Retail sales are estimated at US $450 billion, of which food accounts for 70%. If the government succeeds in enticing further foreign direct investments and domestic demand kicks off, India is set to sustain long-term growth, albeit at lower rates than initially expected.
M+V: How do your clients respond to the current situation in India?
M.W.D: The current economic slowdown has forced the manufacturing industry to tune down production. However, since skilled labor has become a scarce resource in India, many are holding on to their staff. They use freed up resources to tweak their manufacturing process and reconsider their business model. Then, of course, our clients also turn to us for advice, especially on how to manage their working capital requirements and increase the financial efficiency of their supply chain.
M+V: What tips would you provide for medium-sized companies in order to have (long-term) success in India?
M.W.D: India is a very heterogeneous market and strategies may differ from region to region, state to state or even cluster to cluster. It is imperative that medium-sized companies adapt to the local demand patterns. I have observed that companies generally either position themselves as a high-end quality supplier, targeting a small and niche client base, or as a supplier to the mass market. There seems to be little room for “in between” in India.
However, many foreign investments in India are terminated during the first couple of years. Long-term success stems from the root. Before setting up operations in India, it is essential to prepare a proper business case and undertake thorough market due diligence. Foreign companies tend to underestimate the costs which come with an investment in India. Real estate has much appreciated and lease in sought-after locations is expensive – so are highly-skilled employees. Administration is another cost factor. The Reserve Bank of India as one of the main regulatory bodies has imposed many restrictions on the transfer of goods and currencies in and out of India. The management should make realistic assumptions of the human resources which they will consume. It helps to line up with a business partner who knows the local regulations by heart.
M+V: In your view – seen from the perspective of “a German in India” – how important, or put differently, is India particularly important for Deutsche Bank?
M.W.D: It most definitely is. Deutsche Bank has started its business operations in India 33 years ago and by now employs about 9,000 employees. India continues to be an important growth market for Deutsche Bank. In Germany and elsewhere in the world, our clients are expanding worldwide and India is one of the major markets they are targeting. As a strategic partner, Deutsche Bank wants to accompany its clients to India and grow along with them.
Deutsche Bank is already a fully integrated financial services provider to Indian corporate clients. We currently run 17 own branches in India, and our clients enjoy a broad network of more than 700 collection points and more than 1,000 locations for payments, which we can offer through arrangements with 18 partner banks. Deutsche Bank India has also gained significant market share in investment banking, institutional equities broking, asset and private wealth management, retail banking and business process outsourcing.
M+V: What are the advantages of cooperation with Deutsche Bank in India for your clients?
M.W.D: Multinational corporations appreciate that we not only know their business in India but also have a profound understanding of their international strategy because we maintain a close relationship with their parent as well as with its other subsidiaries in the respective domicile country. We leverage the global relationship with the group to provide financial solutions customized to its international supply chain.
M+V: You have been working as Relationship Manager for Deutsche Bank in India since April now. What are your first impressions of the country, people and business practices?
M.W.D: The first weeks have been overwhelming. India is a beautiful country and people were very welcoming everywhere I went. I admire the flexibility that people have over here which is hard to come by in many other countries of the world. For example, in India, I can arrange meetings for the same day whereas in Germany I need to fix them at least one week in advance. Generally speaking, I find Indians to be very quick at finding solution.
Thank you Mr. Mark-Werner Dreisörner for this interview!