Winning in the Indian Market
The Economic Times - October 19, 2007
The payoff will not be instant, but it will be certain, and it will be handsome. The odd thing, of course, is that for some time now much of the strategy literature coming out of the developed world is all about 'creating industry revolution', 'blue ocean strategy', 'creative destruction', and so on. The mindset shift is to recognise that all these advances in management theory are relevant especially to emerging markets.
Many years ago one of the partners in a big five consulting firm declared in a press interview that in the firm, they never hired anyone who believed that India was different. He would ask often "why do you believe that India is different? Do you wear your noses on your ears? Does water flow uphill in India? The answer on both those counts is "obviously not". However there are two compelling reasons why India is different and a "made for India" business is essential to win in the Indian market.
First, the structure of demand in India (and in China) is totally different from that of, say, Europe or America. India has a single digit ranking in the world in terms of total GDP but is below 100 in ranking in terms of per capita income. So the structure of demand is about a lot of people earning and consuming a little bit each that adds up to a lot; and not a few people earning and consuming an enormous amount each that adds up to a lot, as is the case in developed markets.
Secondly, emerging markets also leapfrog in terms of what solutions they adopt, and what performance of products and services they expect - ironically, all because of globalization and ICT technology. Emerging market buyers are money wise poor in comparison with their counterparts in the developed world; but are well informed on what is possible and available everywhere in the world.
And information, as we all know, leads to aspiration, and aspiration to expectation. So can there be any choice but to design customised businesses for India in order to profit from the India opportunity?