The document summarizes similarities and differences between the economies of the US, China, and India, which together represent a large portion of the global economy and population. Some key points: - All three countries have large, diverse populations and economies but foreign firms often treat them as homogeneous markets, leading to high failure rates. - They each have a combination of wealthy, middle class, and poor consumers. However, their financial systems are at different stages of development and their firms differ in levels of globalization. - The US has an older and wealthier population while India has a young and growing middle class. China's population is aging but still largely middle class.

1. China, India and the US: Tale
of three titans
Shyam R. Chidamber

2. The US, China and India represent
a large chunk of the world
• Over 33% of the world economy
• Almost 50% the world population
• 80% of the world wide pool of science and
technology Ph.D.s are from US, China and
India

3. These scenes have become
common place

4. The shape of things to come…

5. Traditional gaps are closing…
shanghai-new-york-mumbai

6. Caveat Emptor:
Making simplistic observations on complex matters…
Nevertheless,
here we go!

7. Three Similarities & Three
Differences

8. Similarity 1: All three are
large, heterogeneous
countries yet incoming
firms see each as a
homogenous market

9. Staggering Failure Rate
• 90% of foreign firms fail in the US
market
• 48% of all foreign firms fail in China
in the first year
• Equally high failure rate of Foreign
firms in India

10. Market Diversity
Markets are not homogenous;
they have distinctly different
consumer preferences and smart
companies realize this

11. New England & California
Old Subaru History

12. Suburu built its US market presence
with avid New England skiiers…
Think of specific sub-markets that
are most amenable…

13. The US is several markets

15. Economic clusters in China

16. Clusters are sizeable

17. Two states: very different places
Kerala
Uttar Pradesh

18. Mickey D caters to Indian and
Chinese palates
In Szechuan province:
McDonald's "Numbing
and Spicy" Premium
Grilled Chicken
sandwich. Note the
Sichuan peppercorns
and red chili peppers.
Meatless burgers in Gujerat
(where vegetarianism is
common)

19. Haier markets successfully to
American urban college
students

20. Mahindra Tractor Commercial
Indian tractors to US family farms
US Customer Satisfaction rating: 97%
US Customer Brand Loyalty Rating: 98%
Fastest growing tractor brand in North America

21. Similarity 2: All three
countries are combinations
of rich, middle class and
poor consumers

22. US, China and India produce a
lot of billionaires…
• US billionaires: 442
• Chinese billionaires: 122
• Russian billionaires: 110
• Indian billionaires: 55 Forbes Billionaire Dashboard

23. …But all three countries have very
high GINI (income inequality)
Behind the gates of the wealthy
food lies rotting from waste
Outside it's the poor
who lie frozen to death – Du Fu

24. Starting salary for a Beida
graduate in Financial services:
3000 yuan/month
Price of Clarks Wingtip shoes:
1000 yuan
Firms seem to
eye the rich…

25. 65% of US households shop at Walmart; 25% of Walmart shoppers do
not have a bank account
The US has a large (and
growing) lower middle class

26. China: an urban middle class
country

27. India is shaping up the same
way…

28. Size of the
worldwide
middle
market:
$30
Trillion!!

29. Liquid Diary Products
(LDP)

31. $15 Phones for the people at the
bottom of the pyramid

32. Selling a billion 2 cent soap packets
is a smart business

33. Similarity 3: Guanxi is
important!

34. Traditionally considered
important in China

35. Indian networks are deep
rooted
Source:
Emory
University

36. Silicon Valley is a dense
network of connections

37. Difference 1: Financial
conditions are in different
stages of development

38. Overall Ranking:
USA: 2
China: 23
India: 40

39. US leads in non-banking
financial services and in
sophistication of financial
markets

40. China lags even India in
several key categories:
• Access to local equity markets
• Ease of access to credit
• Securitization of credit instruments
• Penetration of life insurance products and
services

41. India’s financial marketplace is
lopsided. Highly developed
IPO market, securitization, but
low on legal enforcement of
business contracts, regulatory
framework, transparency
etc…

42. America has a complex adaptive
system of finance; Chinese and Indian
systems are in their infancy

43. Difference 2: US, Indian and
Chinese firms (and
institutions) are different in
their level of globalization

44. Assessment of firm globalization
Chinese and Indian firms are rarely truly global
companies” unlike many US firms…

45. Not even one of these firms features in
the top 100 global brands

46. Indian firms are even less globally
well known…

47. But Indian and Chinese firms have
joined the Global 2000 in record
numbers

48. And they are tapping global
capital markets…

49. Difference 3: The three
titans seem destined for
different demographics

51. India has a potential
demographic
advantage

52. Age disparity among the titans

53. India: Young and middle
class
China: Old and middle class
US: Old and rich
By 2050…

54. It was the best of times, it was the worst of times, it
was the age of wisdom, it was the age of foolishness,
… it was the spring of hope, it was the winter of
despair, we had everything before us, we had nothing
before us, we were all going direct to Heaven, we
were all going direct the other way…
Seems fitting for a tale of three
economies…
Charles Dickens,1859: Tale of Two Cities

55. If a man takes no
thought about what is
distant, he will find
sorrow near at hand.
The future is nearer than we think…we need to better
understand it

56. Our problems are man-made.
Therefore, they can be solved by man.
And man can be as big as he wants. No
problem of human destiny is beyond
human beings. Man’s reason and spirit
have often solved the seemingly
unsolvable — and we believe they can
do it again. ... In the final analysis, our
most basic common link is that we all
inhabit this small planet. We all breathe
the same air. We all cherish our
children’s future. And we are all mortal.
Words to remember…