When analyzing foreign market expansion opportunities the two countries that may come to your mind are India and China– the two largest emerging markets in the world. Since the enactment of trade liberalization and economic reforms in 1978, China was able to propel its growth ahead of India in terms of the manufacturing sector, exports and government spending at an average rate of 10% establishing its infrastructure and service economy early in the game.
On the other hand, India has many of the same economic attributes as China, they’re just behind due to their political instability and economic reforms that were only resolved in 1991. In the last decade, India has witnessed a 7.1% economic growth rate resulting from expansion in manufacturing and service sectors, catapulted by exports and foreign investment. In recent years, India’s middle class has become more vibrant due to the fact that they have experienced technological advancements and education reforms that have aided the nation to gain capital and labour productivity.
What does this information mean for your startup? Simply put, endless opportunity.
If you are considering an effective market-entry strategy for your company, there are essential elements CIAP recommends entrepreneurs to consider as you explore how to conduct business within India’s top emerging cities.
Let’s dive into these crucial elements, and show you how to get a head start.
Research the Economic Landscape
The failure of many startups expanding into India comes from a lack of research and preparation. The undertaking of expanding to India cannot be treated as a homogeneous unit. It requires a thorough understanding of the population in terms of each emerging cities’ specific attributes that align with your business’ goals and offerings. Also, with over 1.3 billion people, several languages, ethnicities, climates, and geographies– you will end up needing more than one “India strategy”. Adequate research and direct feedback can help you evaluate your startup’s potential in India.
- Identify if your products or services are a fit for the Indian market by taking into consideration the country’s needs and problems.
- How do your price points compare to local competitors?
- Who are your major competitors? Who are your indirect competitors?
- How prosperous are your competitors in their respective industries?
- Which Indian city has the most opportunities for your initial expansion?
- Is your startup financially stable enough to support an expansion that can have many unpredicted delays before becoming an established presence in India?
Being Culturally Aware
There are several hurdles you will need to prepare yourself for in order to align with the Indian business culture that is entwined with their religious, societal and ethnic history. Taking part in a cultural awareness training program along with thorough cultural research can position you for a potentially smoother transition to India.
Cultural awareness considerations:
- Find people on the ground in India that can teach you the cultural landscape of India from a firsthand perspective.
- Approach cultural differences with sensitivity, openness and curiosity during the learning process.
- Determine how to adapt your workplace etiquette by understanding their formalities, punctuality, and attitudes.
- Comprehend India’s organizational hierarchy and attitudes towards management.
If you want additional information on India’s cultural landscape, click here.
Recruitment and Retention
India has a lot of well-educated and ambitious employees, therefore, finding talent isn’t difficult. The challenge is creating a compelling work environment that people will want to work in and building loyalty to your company. The employment market in India evolves rapidly; Societies are constantly exploring new opportunities to improve their careers, seniority, and income status. Job titles are extremely important to the people of India as these advancements command more respect from their peers.
Recruitment and retention considerations:
- How will you offer a bright future to the employees you hire into your company?
- What unique perks or benefits can you offer employees to satisfy them?
- Consult a local about what aspects of their employers are most favoured.
- Research what similar companies are doing to attract employees and make your job offer stand out.
Hiring a Business Consultant
A Indian business consultant or advisor can provide great value to your company and team by giving you insights on overcoming cultural and economical challenges, creating sustainable business models and helping you achieve vital business goals. A reputable consultant should take the time to learn as much as possible about your business by touring your facilities, meeting your board of directors and analyzing your company’s finances. Once the consultant is confident in their knowledge, they should begin identifying strengths, weaknesses, foreseeable problems and opportunities.
Business consultant considerations:
- A crucial qualification of a consultant is the level of hands-on experience they have and their track record of previous successes.
- Learn how to accept constructive criticism from the consultant and ask questions.
- Understand the consultant’s pricing structure to ensure you know how much you will be spending. Make sure you choose a consultant based on value, not price.
- Verify that the consultant has worked with other businesses like yours before, as they will have more relevant experience for your needs.
These considerations for Canadian startups are a great place to start when planning and preparing for your Indian expansion. But, there are many more details to consider when moving into an entirely new market with many facets of business to explore.
What do you find to be the most overlooked detail of an expansion?