India is DIFFERENT

How often have you heard the phrase "India is different"? But how many have tried to ponder as to why it is different ? Usually the focus is on the diversity, the languages, dress, food and so on which is taken to mean that India is different from other markets. However when it comes to doing business, India IS DIFFERENT and most including our own selves fail to understand this and so doing business becomes difficult. The ease of doing business is seen as how quickly you get government paperwork completed. While that is no doubt important, there are other complex issues that need to be understood,

For this note I have classified the world into 5 market geographies, namely - Americas, Europe, China, India & Rest of the world.

The American market is the most advanced and mature technologically and the rest of the world follows them over time. The closest behind them is the European market which is unified on many issues since long, even before it became the EU. Both these markets contribute as technology leaders and have the resources, funds, capability, systems and the market to frame and set standards, rules, systems, technology etc. This happens due to the highly mature system of working which involves the government, society and the industry in tandem even if there are cultural or other differences.

The Rest of the world is not united as a market and its constituents do not have a large enough individual market, nor the resources, time, capability etc to insist on creating anything that is suited for their markets. Hence they simply accept/follow global norms which in other words is American/European practices, certifications, technology, etc without making too many demands. So American/European companies find it easy to follow the global way of working in these markets and the only minefield is cultural issues.

China is a huge market by itself and given its “single party” government, can implement whatever it wants with no questions asked. They have the money, resources, systems, capability to design and implement what they decide. Hence be it Google, Twitter, Facebook or other technology issues they demand a “Made for/by/in China” philosophy and get it. They are the 1000 pound Gorilla to who the global corporations & governments “surrender” without asking too many questions. The quid pro quo here is that decisions are fast, access to a huge market and a consumer who wants to identify himself with western economies.

India is a democracy, aligned to the western world in terms of freedom, but has the market, capability, resources (though limited), funds (again very limited) and with a diverse population in terms of culture, wealth and geography. Thanks also to its historical baggage, be it British rule or socialism, and the fact that it has a huge young population, India is mentally conditioned to demand “Make for /by/in India” but is only a 300 pound gorilla. Also thanks to democracy and the skewed growth over the decades, India has to listen to conflicting views and accommodate the demands of global corporation/ governments within its own eco-system and most importantly address the aspirations of every section of the society.

Consequently there are demands that can be pushed through and those that can be pushed back. Also the mental attitude of most, be they in government or even private sector, the approach is to maximise benefits across the widest population possible. With a diverse market having to “satisfy” the maximum numbers on any decision, the market becomes unique, different compared to all others in the world.

In a way it can be said that an automotive policy for example must factor in the Rolls Royce Phantom to a Honda City to a 600 cc Tata Nano, Bajaj Quadricycle to the 200 CC autorickshaw. This directly impacts how India as a whole behaves, customers behave and that makes the Indian market unique and different. This challenge and behavior applies to every sector.

There is a huge value for money perception & some of the attributes considered as value in the western world may not find favor in India. At the same time the behavior of the typical Indian is unique. For example you can have an affluent person wearing a 1500 $ Rolex watch, a 2000 $ Suit get down from a latest Model Audi and bargain with a street vendor over 10 Cents.

The following ads of Maruti Suzuki seem funny, even ludicrous but there is a huge underlying message in them. They are very close to reality if not actually real. if a company selling a high technology solution faces a similiar question from their Indian customer, the option is not to laugh - he is most likely serious. The question asked in the end in each case is the same - what is the fuel efficiency/mileage obtained?

Maruti Suzuki Fuel Efficiency
Maruti Suzuki Tank
Maruti Suzuki - Yacht

Moving on from the value for money perception, on many issues like for example safety, western systems are far more mature and dare I say even dedicated, unlike the Indian market. The underlying Indian philosophy of – What has to happen will happen, Destiny, Its God’s will – makes the whole approach to issues drastically different. This affects different products, different markets in different ways and it is impossible to predict or have a one size fits all solution.

Basically, while American/European attitudes are to have a “Idiot proof” “Convenience” “Perceived safety” approach to what they offer the market, India by and large ignores all three selectively. This makes a vital difference to market and entry strategies and many a company falter on the unknown. 

To give two simple examples – the concept of liability is vastly different in India than western countries. The personal relationship/trust in the spoken word is again very different from the written legal agreements in the western world. Now add to this variations in behaviour and conduct by different castes, communities, religions across India and you virtually have a minefield to cross. 

Anyone who tells you that these factors don’t play a role is either delusional or bluffing. This is not to say that these influence decisions, but they do influence behaviour and approach to issues, decisions. Often these aspects are neither understood, nor explained and rarely if ever thought of by companies attempting to do business in India. Invariably it is a plethora of experiences, stories that you will hear, each different and based on the outcome they judge India and term it a difficult market. They rarely ever attempt to understand its underbelly right from the beginning. 

Indians who advice foreign companies also rarely take the pain to educate them on this. Most either make it very simple or very complicated. Foreign companies on the other hand usually have a system driven approach, think that a one size fits all in terms of strategy, are often inflexible on some perceived core issues, judge the market size from a population perspective and more often than not, learn only by experience. 

By the time they reach a stage of being more pragmatic, adaptive, flexible and realise the real size of the market they would have lost a lot of money and pulling back from this stage is often the hardest. In a nutshell, investing time on “sharpening the axe” so to speak, than to jump in excitedly, by finding the right partners, senior management, listening to their judgement even if it is different to what you think and most importantly analysing it for verification is crucial for foreign companies to succeed in India. In the next part I will talk briefly about some typical and vital characteristics of the Indian market.

The next part 3 is here 

https://rvasisht.blogspot.com/2017/05/indian-market-characteristics.html