Channel: Editor's View Point

  • Navigating through India still the most difficult task for British firms

    The more India-UK collaboration events that I attend the more I feel sorry for British firms as they are unable to get a grip on how to navigate the Indian business and political environment.

    By Sanmit Ahuja On 09 December, 2010

The more India-UK collaboration events that I attend the more I feel sorry for British firms as they are unable to get a grip on how to navigate the Indian business and political environment. A few months ago I wrote an article on how could British companies succeed in the Indian market? I come back to the topic again as it seems that this is the most fundamental issue for UK based firms.

Of all the problems mentioned, inability of a company to find the right Indian partner is the most crucial after they have established the fact that they are ready to bring their product or service to India.

A rather surprising issue is the innate desire and obsession of UK firms to continue trying the joint venture route. Time has come to drop this obsession for if they don’t they will be the ones left standing on the sidelines.

There is a general perception on the ground in India that UK firms generally lack the aggressiveness of the Americans or persistence of the Koreans and that they were a bit late to arrive to the party. As a result most of the better Indian firms had already tied up with other competing partners. That is largely true. Additionally since the Indian firms do not want to tie themselves down to an exclusive partnership which makes any potential alliance less special.

It is also true that the general business environment in India is challenging. The regulatory framework is continuously shifting, the eco-system in many a sector is largely under-developed and the skills-base is not what it is made out to be by the general media. But I very clearly see this not as a deterrent but as an opportunity. The lack of the right eco-system gives you an edge amongst other potential competition if you are willing to work hard in developing that eco-system. Look at Unilever and Standard Chartered. They are benefiting from India in ways that even they could not have perceived before.

Standard Chartered is now making almost a quarter of its profits from the Indian market. Although they have had a presence in the country for well over a 100 years, but in actual fact the real push only came in the last couple of decades. The investment into organic growth resulted in creating a huge talent pool that the bank is then able to move around to other markets, particularly those within the emerging or high growth categories.

Smarter firms do not just look at India as just a market. They see it as a test-bed of business model and frugal innovation. These firms have their eyes set on a global market within which Africa features prominently. Most companies have to tweak the pricing of the product or the service to cater to the Indian retail or business consumer. Other developing countries have the same set of issues. What works in the UK will not necessarily work in India. However what works in India will definitely work in Africa or Latin America or South East Asia.

If you rely on a joint venture partner in India, your firm will never get exposed to the business models that emerging markets warrant. In the long run that will prove hugely detrimental.

 

Copyright ETI Dynamics Ltd. 2011. You can share articles and reports using the share tools where possible. Please do not cut content from the tiCorridors.com and paste into emails for distribution purposes or on to other websites.

spacer