by Maarten van der Schaaf. Maarten van der Schaaf is partner at the Amsterdam-based consultancy IndiaConnected.
An Interview with IndiaConnected partner Bart Hergaarden is featured in the 1st issue of the Cross-Border Magazine, available here.
India is often described by companies in three words: poverty, bureaucracy and corruption. Conclusion: stay away. Wrong. This extremely simplified view of India can seriously harm the future of your business.
It is undeniable that poverty, bureaucracy and corruption are part of the Indian business environment. However, these same three evils do not prevent most companies from doing business in Brazil, Russia and China, right? And while the other BRIC countries struggle with stagnating growth, the Indian economy has only been gaining momentum in recent years. Indeed, Dutch financial daily Het Financieele Dagblad sent out a wake up call this spring, urging businesses to finally take India seriously.
The esteemed newspaper admitted it had been part of the problem itself. The negative, and often missing press coverage of the Indian subcontinent has seriously clouded the enormous business opportunities in India, concluded Het Financieele Dagblad. Whether you like it or not, India will become the largest consumer market in the world by 2050. Larger than the US and China, according to The Economist. So every company that cares about its future business, should take some time to explore the Indian market. Considering the fact that building relationships takes time and is crucial for success in India, this exploration should start sooner rather than later.
Most multinationals have known the importance of India for decades. Philips, Siemens, Unilever, Heineken, TomTom, Elsevier, AkzoNobel and Shell have all been present in India for years. And not just to outsource their IT and other business processes. Philips has an inspiring innovation campus in Bangalore, Heineken is the largest beer vendor in the country, supermarkt chain Carrefour buys its grapes in India and Volkswagen is building its cars in automotive hotspot Pune.
The opportunities for SME’s in almost every sector are overwhelming. Companies with expertise in (sustainable) energy, smart mobility, water and waste management can offer their help in the construction of over 100 smart cities throughout India. Agricultural expertise is needed too: 40% of all veg and fruits currently rots away before it reaches domestic markets. Greenhouse builders, logistical solutions, cold storages, it’s all needed – and it is needed now. Also, retailers who are struggling in Europe can enjoy high growth in India. Hunkemöller, that opened its first stores in Bangalore and Delhi this year, is a great example. The retail chain expects to expand quicker than expected to twenty stores in various cities: its sexy lingerie is clearly selling well.
Or take the creative industry. Thanks to digitalization and the fast adoption of smartphones, this sector is growing at dazzling speed: TV-production house Endemol/Shine managed to become the biggest television producer in India within 10 years. Reality show Big Brother (in India called Big Boss) is already in its 10th consecutive season. The popular show is screened in three different versions – all adapted to regional languages and regional cultural context. Music festivals and live events are a huge growth market too. The worlds biggest festival for electronic music, Amsterdam Dance Event, just finished its first sold out edition in Mumbai.
Companies that complain about poverty, bureaucracy and corruption in India miss the bigger picture. While Europe fights economic stagnation and unemployment, European companies should more than ever look abroad for growth. To overlook India would be foolish.
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