If you’re looking to export, there’re no ‘easy’ markets left – just unique ones. And they do not come much larger, or more unique than India.
With a population topping 1.3 billion and a GDP expanding by eight percent a year, India is the fastest growing market in the world, thanks in no small part to an economy that has been radically transformed from a pyramid with a small, elite at the top, to a diamond, with an increasingly affluent middle class at its centre. Unlike Europe or North America however, India is not a saturated market, and there is more than enough room for the kind of small and innovative companies New Zealand traditionally produces to succeed, particularly in its thriving technology sector.
From software to hardware and services to solutions, India has an insatiable thirst for innovation, combined with the largest youth population in the world – a young tech-aware generation of 70 million and climbing.
However, the realities of life on the ground have also greatly influenced India’s need to leverage technology. With such a vast geographical area and diverse cultures, providing even necessities like education and medicine can be a challenge, causing both government and the private sector to increasingly turn to technology for answers – with the scale of some of these projects staggering. India currently has 460 million people online and some of the largest programmes in the world for providing data at a rural level, with 250,000 villages due to be connected, including 100,000 this year alone – requiring an unbelievable 300,000 kilometres of fibre-optic broadband.
So how can Kiwi companies take advantage of this growth and the positive way New Zealand is perceived in India?
The first possibility is to sell direct. However, its worth noting that India is by no means a single, homogenous market, but rather an exceptionally diverse series of them, each with its own unique demands, requirements and price points. This makes a clear focus on which area, territory or region you intend to move into vital, along with the flexibility to localise your product or service. McDonald’s, for instance, is not exactly known for tasty vegetarian food, but in India, a country where a large part of the population abstains from meat, their menu features a large range of popular veggie options.
Another possibility is to engage in a joint venture with a local company – either an established firm or one of the 5000 new start-ups that emerged last year alone, including more than 700 in technology-related fields. This could potentially be ideal for smaller New Zealand companies who want to minimise initial costs, enhance their product to appeal locally, or reduce the time it takes to reach the market by leveraging the enormous amount of talent found here, including four million highly trained technology professionals.
Whichever you choose, making an impact will eventually require a physical presence on the ground – either an office, a representative, or a distributor who can help you expand. Connecting Kiwi companies with trusted people and the right local insight is an area where NZTE has had enormous success, including through a series of industry events that allow Kiwi companies to meet local experts and industry influencers in order to get a better understanding of the market.
Success stories
Happily, there are already Kiwi success stories. Auckland’s Vista Entertainment Solutions, for instance, develops ticketing platforms to help customers book cinema and theatre seats. After partnering with a local company that was interested in automating the industry, 1200 India cinemas now run their software, giving them a 75 percent market share at their targeted level. Why was this successful? Strong conviction, an innovative product and an excellent partner who knew the market.
An example of a 100 percent New Zealand owned company, meanwhile, is STAAH, which provides hotel management software. In 2012 they entered the Indian market after discovering the opportunity a country of more than one billion people can provide. Their first move was to appoint an Indian born representative who had also worked in New Zealand and knew both cultures well. Today 1,500 hotels across the country use their platform, all at a similar price realisation to what they could generate in New Zealand. Additionally, STAAH leverages tech resources in India to develop and support customers in the Middle East and Europe.
India can easily overwhelm anybody at first, and understanding may sometimes take time and patience, but the rewards can be enormous. And whilst you will certainly hear anecdotal stories of the difficulties forced and tough price points – and some of them true – India is changing fast.
Not to explore doing business in India may be a lost opportunity.
Article by by Som Mittal – a Beachheads advisor at New Zealand Trade & Enterprise.
