Doing Business in India ver 2.0
Upcoming SlideShare
Loading in...5
×
 

Doing Business in India ver 2.0

on

  • 838 views

This is a part of the presentation I made to the executives who are doing MS-MMK in France and visiting ESSEC Singapore campus. The presentation paints only a partial picture of India and therefore ...

This is a part of the presentation I made to the executives who are doing MS-MMK in France and visiting ESSEC Singapore campus. The presentation paints only a partial picture of India and therefore should not be used as a guide to do business there. Nor should it be used as a manual to understanding India consumer, culture, legal system, or anything related to India. The standalone presentation is necessarily out of context. A discussion along with this presentation provides a more helpful exercise.

Statistics

Views

Total Views
838
Views on SlideShare
829
Embed Views
9

Actions

Likes
0
Downloads
13
Comments
0

3 Embeds 9

http://www.linkedin.com 5
https://www.linkedin.com 3
http://ajajajajad.blogspot.sg 1

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Doing Business in India ver 2.0 Doing Business in India ver 2.0 Presentation Transcript

    • Doing Business in IndiaChallenges to Marketers
      Prof Ashwin Malshe
      Presentation made to
      MS MMK Executives
    • About Ashwin Malshe
      PhD (Marketing), MMS (Marketing), BE (Electronics)
      Seven years of industry experience
      Institutional sales
      Analytics
      With ESSEC since July 2011
      Multiple research interests
      Marketing strategy
      Marketing-finance interface
      Consumer behavior
      Social media marketing
      Blogging activities
      Micro-Positioning
      Flirting with Finance
      2
      04/10/2011
      Doing Business in India
    • Source of Data
      I use several sources of data to get the numbers reported in the presentation. Specific instances are noted on the slides. Wherever the source is not identified, the data come from the CIA World Factbook
      3
      04/10/2011
      Doing Business in India
    • The Story of IndiaA BBC – PBS Documentary
      4
      04/10/2011
      Doing Business in India
    • India – A Few Statistics
      7th Largest country by area - 3,287,263 sqkm (land and water)
      28 states and 7 union territoires
      2nd most populous country in the world – 1.2 billion est.
      Secular country
      Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%, other 1.8%, unspecified 0.1% (2001 census)
      16 official languages!
      Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%
      English is the preferred language for most of the commercial and political purposes
      Parliamentary democracy
      Model borrowed from British. Prime Minister is the head of the government
      5
      04/10/2011
      Doing Business in India
    • Population Composition
      6
      04/10/2011
      Doing Business in India
    • Economy
      GDP
      PPP terms USD 4 trillion – 5th largest in the world
      Official exchange rate USD 1.6 trillion
      GDP real growth rate 2010 – 8.8% est. (World Bank)
      GDP per capita – USD 3,500
      7
      04/10/2011
      Doing Business in India
    • 8
      04/10/2011
      Doing Business in India
    • Culture
      Conservative in several aspects
      Women, by law, are at par with men. In reality they are treated less than equal
      Meritocracy is partially practised
      Caste system is weak in the cities but still manifests strongly in the smaller towns
      Families matter more than individuals
      Culture is more collectivistic than individualistic
      Common to see people taking into account the impact of their decisions on others in the family or even a larger community
      Many decisions become “family decision.” For example, buying a TV, washing machine, or a car may not be decided by one person alone
      Group vacations are common too!
      9
      04/10/2011
      Doing Business in India
    • Culture
      More tolerance towards nonconforming ideals
      As long as you don’t interfere with their way of life, tolerance to your practices is guaranteed
      India is perhaps the only country where Jews were not persecuted
      Zorastrians (Parsis), the original inhabitants of Iran, live in India without facing any pressure to relinquish their culture or religion
      E.g., on Japanese culture
      There prevails a general sense of inferiority complex due to British occupation
      Many cultural aspects change from state to state
      10
      04/10/2011
      Doing Business in India
    • Political Economy
      Socialism sympathetic policies
      • Early influence of Soviet Union
      • A large vote bank resides in rural areas
      • Agriculture sector is still the largest employers of the uneducated people
      Caste and religion politics is important
      • Election results are still determined by non-economic reasons
      Caste (reservations in education and government jobs)
      Minority religions may vote en-block
      Changes in caste and religious policies don’t need huge expenditure and the results are visible quickly in the form of higher percentage of votes
      Poor people vote in exchange of minor benefits
      • High levels of illiteracy and poverty combine to create a voter that can be manipulated easily by the politicians
      11
      04/10/2011
      Doing Business in India
    • Political Economy
      Corruption is growing in size
      A huge wealth transfer has been undergoing from the people of India to the government officials and leaders
      Corruption at multiple levels
      Ordinary people have to pay for the services that the government should provide them free of cost
      Government officials may collect the appropriate fees but then won’t deposit it with the government
      Ministers grant licenses to businessmen in exchange of partnerships, cash, or both
      Bribes are paid to cover up irregularities or even crimes
      Most of the ministers in power are hundreds and thousands of times richer than an average person in India
      12
      04/10/2011
      Doing Business in India
    • Political Economy
      Government favors rapid expansion of businesses in theory
      In reality bureaucracy has all but stopped the development in India
      Very low investment in infrastructure
      McKinsey Global Institute report identifies the challenges faced by India
      Weak regulatory enforcement
      Lack of desire to make sure that the regulations are enforced
      Corruption thwarts most attempts to enforce regulation
      Government provides inadequate resources to regulators
      Uncertain legal structure
      In modern economies legal protection to various contracts enables trade
      In India legal system is slow as well as corrupt
      Courts are overwhelmed by the pending cases
      Contracts are not easily enforceable
      13
      04/10/2011
      Doing Business in India
    • Characteristics of Indian Consumer
      Price conscious
      Rational
      Usually conducts research before buying
      Takes into account opinions of others
      My personal experience is that Indian friends on Facebook as more questions about which computer, phone, tablet, etc. to buy
      Try to be discreet with large purchases
      Potentially safety concerns but more importantly trying to avoid getting noticed even by the friends and relatives
      Tends to save more
      There is no social security system in India
      14
      04/10/2011
      Doing Business in India
    • Entering India Market
      15
      04/10/2011
      Doing Business in India
    • Entering India Market
      16
      04/10/2011
      Doing Business in India
    • Opportunities: Examples
      Telecommunications
      Infrastructure
      Consumer goods
      17
      04/10/2011
      Doing Business in India
    • Telecommunications
      18
      04/10/2011
      Doing Business in India
    • Opportunities in Telecommunications Sector
      Mobile banking and payment
      • Most rural Indians don’t have access to easy payment modes such as credit cards
      • However, mobile phones penetration is deep in rural India
      • Safe mobile payment systems are gaining popularity
      Reserve Bank of India has introduced guidelines for mobile banking
      Mobile banking transactions can be up to Rs 50,000 (USD 1,000) per day
      Small transactions don’t need encryption
      Mobile gaming and apps
      • Mobile gaming in India is expected to grow at 75% per year over the next 3 years
      • Different estimates put the mobile gaming industry close to USD 1 billion by 2014
      • IT giants such as Wipro and Infosys are entering mobile app business
      • Outsourcing is now shifting to app development
      19
      04/10/2011
      Doing Business in India
    • Infrastructure
      MGI report covers many aspects
      Opportunities are high in the following areas
      • Transportation
      Subways
      Roads and bridges construction
      Shipping ports
      Airports
      • Power generation and distribution
      Energy prices are regulated by the government and weak contracts mean that these investments can be in trouble if prices change dramatically
      • Special economic zones
      • Water purification, recycling, and distribution
      Industrial effluents
      Domestic sewage
      Standalone systems
      20
      04/10/2011
      Doing Business in India
    • Case Study: HUL Pureit
      21
      04/10/2011
      Doing Business in India