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
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.