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Getting the….
….right in India
Fast factsCapital – New Delhi
Financial centre – Mumbai
Population - 1.17 billion
Parliamentary democracy
Inflation: 9.98% (March 2010)
Literacy rate (2007) : 66.0% Adult
82% Youth
More than just a handful of figures
India has always been
Diversity is the buzz word….
a land of many….
Many kinds of people…
with more than 22 languages…325 recognized dialects
Indian culture starts with a small dot
but is so far reaching…
Where old…
and new exist in harmony..
Where religion is an integral part of life
And there is nothingtoo less for God!!
….but its all in good spirit!
…where people do war over a sport…
India = a Paradoxin this diversity
You can go from high rises..
…to slumswithin a 100 yards…
You can have a sedan on a dirt track
…and bullockson the highway...
Where soft drink giants compete for sales in billions …
…..But can’t beat the local ‘LIMBU PANI’
And Vada Pav(Indian local ‘burger’)….
…to McDonald’s…
Where women may still hide their faces
…yet Win world beauty
pageants
Where high illiteracy co-exists with….
... World class education and one of the best qualified workforce
Where Jumbo’s ferry people….
.. But are being replaced by Jumbos of another kind
So…the name of the game is to understand the culture and adapt to it…..What India is today and how it will change tomorrow…
YES….India is changing…
The changing face….Youth
“This is the generation that is reclaiming India's future, this is India's 'found' generation.”
Gurcharan Das, Former CEO, P&G, India
This predominance of youth in the population is expected to last until 2050 Youth literacy rate (age 15-24), 2007 : Male 87%, Female 77%Large number of students study in US, UK, Australia & other countriesYoung Indians making waves in world music, fashion, literary and intellectual circles
And Indians are Younger than the World…
The changing face…LifestyleNew market opportunity
The fast pace of GDP growth - driving consumerism;Indian consumers - more confident and willing to splurge
Fast-growing disposable incomesIncreased availability & use of consumer finance and credit cards Keenness to adapt to and assimilate global trendsOver 60% of the population in the working age group (15-60) till 2050
The changing face…LifestyleNew market opportunity
Products and Services- ready to eat food, entertainment centres, labor saving devices
Channels of Distribution- Malls, multiplexes, home deliveries and multi level marketing
Value Provisions-convenience, fashion, reliability, quality rather than “price”
stereotypical Indian!!There is no “Average”
An Urban North Indian …
Beliefs & values – conservative in thinking, respectful
Lifestyle – flamboyant, likes to have a lot of external glitter
Behaviour – warm and friendly, herd mentality, inquisitive
An Urban West Indian …Beliefs & values – progressive by nature, professional, values time Lifestyle – balanced, but very task-orientedBehaviour – non-interfering but helpful, early adopter, trendsetter, calculative
An Urban South Indian …Beliefs & values – orthodox and deep rootedLifestyle – simplistic Behaviour – curt but pragmatic, practical, conservative, cautious, not a risk-taker
The average Indian consumer…the regional divide
An Urban East Indian …Beliefs & values – slow in speed, relaxed, simplicity Lifestyle – traditional, simplistic, basic Behaviour – opinionated, slow to adopt, rigid
An average Urban consumer …Beliefs & values – a balanced approach to life (modern and traditional), forward-looking
Lifestyle – flamboyant, likes to have a lot of external glitter
Behaviour – warm and friendly, herd mentality, inquisitive, early adopters
An average Rural consumer …
Beliefs & values – orthodox and deep rooted
Lifestyle – crude and simplistic, need-based
Behaviour – conservative, cautious, not a risk-taker, very humble
V/s
And the great Urban and Rural divide ….
CultureFolded hands – getting around to shake them!! Religious customs, rituals and beliefsSavings economy – now changing slowlyValue for money attitude Economically multi-tiered, culturally distinctiveDifferent identities, ideologies, interests and outlookGeographic diversity - more a continent than a country !
There’s a right way and a wrong way to every thing –but that can change from place to place
Culture….business cuesDecisions are made at the top of the hierarchyBold, get it done style ineffective“No problem” means “I’ll try”“Yes” means “May be”
India is among the few countries in the world to have such an excellent synthesis of modern thoughts and simple behavior. I don’t think I would like to stay in any other country.
K. R. Kim, MD, LG Electronics, 6 years in India‘
’Who “U know” is more important than who “U R”!
“Nodding head” side ways means yes / no – need confirmationViability of business depends on relationshipsLocal political influence
Overall you need to….Indianise, Humanise, Harmonise...
Global firms must realize how Indian they must be to succeed
McDonalds- finding its way into the heart of India’s billions
Global firms must realize …
Finnish mobile-phone maker has been selling handsets designed specifically for India - NOKIA 1100
Featuring dustproof cases and flashlights Nokia mobile van
Nokia has launched its new music oriented phone 5700 XpressMusic
Global firms – Targeting the new Indian professional
Ford FIGO-Specially designed for Indian roads90 per cent made of local components, Painted with colors that work in IndiaMore boot spacelow costs
What was very American just got very Indian.The Figo – designed keeping in mind the aspirations and needs of the young and ambitious Indian professional.
Global firms – become India Ready
Samsung - India Ready Ad campaign
Welcome Summer
Global channels- reaching the masses
Discovery ChannelCartoon NetworkGlobal brands Indian programming
Indian superstar Aamir lends Elmo a helping hand
Global brands must Indianise
Guess who’s sporting
a TAGHeuerin India?
Global firms must Harmonise
The paradox continuesMeet today’s
urban globalised
Indian
We Read
We Watch
We Enjoy
Building the Brand
Nitin Nohria –First person of Indian origin to be become dean of Harvard Business School (HBS)
Vikram Pandit – CEO, Citigroup
Indian brands- traditionally speaking
Truly a land of people,paradoxes
& potential !!
Advantage INDIA
Strong Economic Fundamentals
Current GDP growth 6.7%GDP (purchasing power parity): $ 3.528 trillion(2009 est.)GDP - per capita (PPP): $ 2,932 (2009est.)Foreign Reserves: $287.37 billion (end-Dec 2009)
1.03.5
6.09.2
Average annual GDP growth
02468
10
1900-1950 1950-1980 1980-2002 2002-2007 2007-2010
6.7
Dynamic Financial Market
FDI Apr 09- Jan 10 – USD 22,963 mn3rd most attractive FDI destination – UNCTAD 2009FDI in skill-intensive and high value-added services industries e.g. financial services & IT2% bad loans in Indian banks (v~20% in China)
Robust framework for Global Business
World’s largest democracyStable government –landslide victory of Congress in 2009 electionsGlobal Indians: 30 MnStrong judicial system
Improving Infrastructure Some of the largest infrastructure creation in the World (Golden Quadrilateral - 5,400 Kms)Planned investment of about USD 160 Bn in next 5 years
Entrepreneurship Spirit
1,000 Indian Companies have received FII125 Fortune 500 Companies have R&D bases in India390 Fortune 500 companies have outsourced software development to India
47 Indian Cos among Forbes 2000 Global list (2009)Largest number FDA certified plans outside USLargest number of companies registered in a stock Exchange
Manufacturing Capability
Second best location for Manufacturing FDI (UNCTAD)27 % Of GDP53 per cent of total exports79 per cent of FDI Employs 11 per cent of the workforceExports to touch $300 bn by 2015- Mckinsey Report
Human Talent & R&D CapabilityLabour force 467 million (2009 est.)Avg Age- 25 yearsEnglish widely spokenLargest number of engineers – 0.6 Mn p.a.Large pool of scientists & strong research base – 0.1 Mn p.a.Home to USD 23 Bn IT exports
Vibrant Consumption (Global Share%- 2008)
Over 400 Mn consumers38 Mn Mobiles (5.5%) 10 Mn TVs (15.3%)7 Mn 2 wheelers (25%)5 Mn PCs (2.3%)
India ranked 1st for the 5th time on the global consumer confidence index (June 2007, -Nielsen Co).Over 300 mn Indians are expected to have a household income of over US$30,000 in PPP* terms by 2015
ChallengesInfrastructure – new / up gradationAgriculture and land reformsLack of education and basic healthcare facilitiesIncome and social inequalities – bridging the gapRegional DisparitiesPrivatisationLack of social securities benefitsLeakages in public distribution systemJudicial delaysBureaucracy & Corruption
Some key learningsDon’ts
Take short-term positions in this marketplaceLeave the marketing inputs entirely to the Indian partner -In the early period the Indian partner would provide the “Sales” inputsTie-up with the first person you meet who has “Contacts” in the Government and other places
Do’sTake a good look at price points -most companies have special pricing for the Indian market Conduct a quick market assessment for your services, at least covering segment size, competition within the segment, and channel structureDo check out how “Training and Support” is to be provided and the resultant “Cost Structure”Take trouble to first profile the type of partner you need, then identify and evaluate the partnerThink innovatively -Can you do something in the marketplace which the others have not thought about?Review your plans at least on a quarterly basis. Have a defined person from HO responsible for deliveryInvolve your finance/ legal executive in the initial set-up stage apart from technical personnel
Thank You
Saumil Shah - [email protected]
2nd Floor, Ballard HouseAdi Marzban Path, Ballard EstateMumbai 400 001, IndiaTel: +91 22 66178000
www,skpgroup.com
