My initial approach to India was to mirror my approach to all international markets I considered doing business in, desk research first. This time however with a number of experienced graduates studying for an MBA in business at Newcastle university I decided to enlist the help of one of them to carry out the research needed. Following several meetings getting to understand what type of information we needed to assist us in our understanding of the Indian market and its potential for our products our relationship with Kunal was founded. So detailed was the information to the questions we required answering along with Kunal’s enthusiasm for the task that I hired him.
6 years in and the rest as they say is history! Kunal and I then set about establishing a foothold into the market resulting in the formation of Miller India which was established in late 2009 early 2010.
Complex, frustrating and very hard work. India is all these things but with a growing economy, a desire for change, English as their business language, a shared history and a now pro active government it’s a country that can offer a real export opportunity.
Listed below are my 5 tips you should consider if your thinking of doing business in India.
- Do Your Homework
India is an extremely diverse country with lots of variance between its regions/states ( for example the amount of tax varies per state). You should take the necessary time to understand what this may mean for the product or service you are interested in offering there. Having a greater market understanding before starting any sustainable business operation in India is in my view essential.
Note: please seek advise if you are considering doing business in the states of Uttar Pradesh & Bihar
- From Small Acorns – Big Trees Can Grow!
Because of the diversity of the Indian market and its sheer size you may find it Is better to select the most favourable state/region that holds the most potential, to your business and start there. Develop this area and use it as a learning curve then start your expansion across India at a pace you control.
- Build A Brand
Indian business people are in the main entrepreneurs and so after some persuasion they may be prepared to try a product or service that they feel could make a difference/ improvement to their business. However, whilst this creates an opportunity its also a potential threat as without what they would recognise as a Brand behind the offering they may feel they could source or build this cheaper themselves.
By creating a Brand that represents quality and good value then this will provide some form of protection against this threat. Remember to use the India/Anglo heritage to your advantage, Indian businesses continue to hold British designed goods and services in very high regard.
- The Devil Is In The Detail
The legal system in India is extremely slow and very bureaucratic.
It takes a lot of time, effort & money to fight cases legally therefore this option should be seen as a last resort and therefore you should concentrate on spending the time on ensuring you have all the protection you need through a detailed and well scribed contract that is recognised by Indian law.
Contracts should be seen as a deterrent by your business partner and therefore the more detailed the document then generally the more of a deterrent this will be. In the event you do not enter into a written agreement with an Indian company then ALWAYS make sure that when agreeing any transaction you document your understanding of the terms thoroughly – NEVER act on a verbal agreement, if your interpretation varies even slightly to that of your customer it could prove very costly.
- What Was The Price?
Pricing in India varies dramatically depending upon the region, business partner and product. It’s a good idea to offer price guidelines to your partners and customers if they intend to resell your products, especially if your building a brand. If you leave your partners to set the pricing then more often than not they will treat each sale on its own merit (very often going for as much as they can get ) which generally means that customers purchasing the same product type will pay very different prices, not a good start if your underlying message is ‘value’ . Remember that it will be the product that is questioned in this scenario and not the company or person who sold it to them!
The Indian market is so diverse that you will find there is a product and price range to suit all. There are those people who are particular about quality and are therefore willing to pay a higher price for it and there are those who will only ever only buy on price, you need to decide carefully which area you are going to compete in.
It’s never an easy decision to take entering a new market and with every step comes a new challenge. The best way to ‘risk manage’ this process is to understand fully the culture and the business quirks of the people you want to sell to. Knowledge is power and being prepared for the journey ahead ensures a much smoother ride.