First published in April 2016
Starting a business in India needs a hands-on, people-driven and contacts-centric approach to reach India’s huge market potential. In India it is important to understand the people and local networks, yet what is often overlooked is where to find the right market for you and your products, and how to generate Indian customers.
Efficient management of your investment plans, your time and your resources is the key to business success in India. You need to learn everything there is to know about the characteristics of the Indian market before starting to do business in or with India. Those aiming to sell their products to Indian customers or distributors must identify potential customer groups and collect quantifiable market information in India. Attending India-specific trade fairs is a common first step to get an impression of the country and the characteristics of the market – and to get in contact with prospective customers and partners.
First impressions: Attending trade fairs in India
Especially in the export sector there are a great variety of trade fairs which are worthwhile to attend – either as a guest or exhibitor with your own stand. It’s a good idea to gather all relevant information and choose a fair that suits your interests – in India the quality of trade fairs varies considerably.
Click here for our industry specific newsletters that include up-to-date overviews of events.
Indian trade fair visitors are generally very interested in European products and solutions, and getting into conversation with Indian businessmen is usually very easy. However, it is essential to know which partners to approach and whom to avoid and caution is required. Euphoric statements by Indian businessmen regarding their capacities, skills and references should be checked in detail – if necessary on site in India. Exuberant enthusiasm over new business relationships often results in disappointment – usually due to different receptions on the relationship, slow progress, misunderstandings and different set of priorities, change in personnel, or even deceit which might cause considerable damage to your own company. Hence, it is important – as is in all business relationships – to exercise due diligence over the partners in India. This also means that it makes sense to set up meetings with potential buyers and partners before attending the exhibition so you can spend your time most effectively. When you get deeper into exploring the partnership we recommend a close look not only at the financial situation, but operational quick checks and related customer and network relations if possible.
A product-specific market study for India – and a detailed business plan for market entry
Companies interested in sustainable and long-term relations with India should think about commissioning a product-specific market study. Customized market studies offer detailed information on the current market situation for that type of product and future forecasts; depending on the scope of the analysis, they usually take ten to fourteen weeks.
Acquiring reliable market information in India is rather difficult because for a lot of product sectors there is hardly any accurate secondary data available. Therefore, copious analyses via discussions with experts and government officials, field studies, access to national, regional and local distributors and in-depth evaluation of all available data are necessary to get a good understanding of the Indian market.
Once you have your market study it is time to develop a business plan, reviewing your company’s objectives for India with regard to feasibility and cost effectiveness (i.e. products and prices, sales potential, general conditions, expected costs and risks, factors for success etc.). Later, this report will serve as a foundation for determining if – or rather how – investment in India should be carried out.
Both conducting a market study and preparing a business plan should be done with experienced specialists with reliable references and established operative structures in India. Maier+Vidorno have years of experience in operative business processing for foreign companies, and are experts who can assist your business in India via strategic mentoring and planning. Click here for more information!
First-hand information: Foreign representation in India
The best way to gather information and build business relationships in India is to employ your own team; and this will ensure that your sources of information can be organized and operated first-hand. However, this model requires a lengthy commitment to India and the Indian market.
One possibility is to open a liaison office in India. With a liaison office you are allowed to conduct market and industry analyses, contact potential distributors and perform marketing activities. If you are planning longer and more extensive projects then it is usually better to launch a subsidiary in India.
We at Maier+Vidorno will be happy to provide you with further information on local employment, start-up solutions, and the different types of business entities in India – feel free to contact us!