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Growth opportunities in India
Strategic pathway for American corporations to enter the
Indian market
Much has been made
of the offshoring of American (and from other countries in the
developed world) jobs to India. The reality is that
considering the size of the US economy, the impact is not
material. The reason it seems significant is that the US
economy is still in deep trouble due to a structural realignment
underway that could take another 3-5 years. (Related
article: Offshoring
forecast to grow 50% a year)
We forget that we have been offshoring jobs for
decades now; this time the difference is that the jobs that were
offshored belonged to people who had a voice. When we sent
manufacturing jobs overseas in the past, a local newspaper may
have highlighted the plight of families that got into distress but
the elites (who control the national media) did not find the
stories juicy enough. With some white-collar jobs sent
overseas, the situation is different. Availability of tools
like websites and blogs, it seems as if the world is coming to an
end for American workers. We at iProceed
see things differently. Our research is showing that the
investments being made in India by companies from the developed
world and the improvement in incomes of educated Indians create
tremendous business opportunities not just for American companies
but also for Americans who are among the best in the world when it
comes to entrepreneurial spirit.
Why is India an attractive market?
- The base at which India is starting is
very small. Think of the United States in the
sixties. In some parts of India, think of the
United States almost two hundred years ago. Or in
other words, everything will simply go up.
(Related:
India hype)
- A huge population with some estimates
putting the middle class at approximately 300
millions (using the purchasing power parity estimates).
- Fascination with anything
"foreign", comfort factor with western
culture/products, and lack of obsession with
"Indian" (something that made it so hard for
American companies to succeed in Japan).
- Existence of the foundations of a
democratic society and legal framework.
- Educated workforce with excellent
command of English language.
- Return of Americanized Indians to India
(what Indians are now calling as "brain gain"
as opposed to the "brain drain" of the 80s and
90s that brought the smartest Indians to the US) who are
now ready to help American companies do business in
India in "American style".
How to develop an India strategy?
- Think long-term. Most of the
growth explosion in India is less than five years old
and basic business infrastructure is still developing.
- Just because your target market speaks
English and appears to be very comfortable with western
culture does not mean that you can start thinking of
Indians as Americans. Despite attending schools
and universities that replicate American campuses and
watching American television all day, Indians have a
very strong culture that is rooted in centuries of
history. When you do your focus groups or conduct
your market research, use a local firm and make sure
that you do not force an American business model in your
India operations.
- Finally, learn to work within the
Indian system. Almost everyone is corrupt, the
sense of urgency that we take for granted is missing,
and ethics are somewhat different. Or in other
words, develop an "India strategy".
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