INDIA ENTRY STRATEGY: 5 IMPORTANT ASPECTS TO CONSIDER
Considering the sheer size, economic fundamentals and vibrancy India holds, it does make sense to enter this market sooner than later. But what will be your India entry strategy? India comes second on the world population statistics with 1.3 billion people and is the seventh largest economy of the world in terms of GDP. However, it is also complex to enter this market without any prior experience and understanding of the regulatory and tax environment. Therefore, it becomes extremely important to keep in mind a few factors while entering the Indian market as a company from abroad, must contact with tax consultants in India.
1. A partner in need is a partner in deed
Taking from the popular idiom ‘a friend in need is a friend in deed’, finding a partner who understands the Indian market, culture and economic landscape of the country can work out to be the best decision when looking to invest in the market as a new company. Experience and insight from the local company or the partner can help the new entrant in understanding the regulations, competition and pulse of the market. It can go a long way in helping the company not only comprehend the basics of the market scene in the country but also help network and build connections for future development.
2. Localisation holds the key to your India entry strategy
While globalisation has dominated the world over for much over two decades, a very important strategy that still holds value when investing in a foreign market is to cater to the local population with their choice of products and services. Even a big chain like McDonalds had to offer vegetarian fast food options in India when they entered the Indian market. Their popular options including beef burgers were not introduced in India considering the religious sentiments and sensibilities of the Indian population. Localise is the mantra and localisation is the way forward to approach the Indian market keeping in mind that the Indian society is multi-lingual and pluralistic in outlook. Even tastes, preferences and cultures differ from one region to another. One of the latest buzzwords is hyper-localisation which means catering to customers across regions with ‘well-targeted personalisation’. This caters to region-wise tastes and preferences.
3. Pricing dynamics
A fact that is given is that the Indian economy is predominantly low-middle income which means that your India entry strategy should be well-aligned when it comes to strategizing the prices. If the business is targeted towards low and middle-class economy, then the entrant has to bear in mind inflation figures and budget constraints of the low and middle class. As per the World Bank records, the per capita income of the people in terms of purchasing power parity (PPP) stands at US$6,490 in 2016 and a major part of the population is still below the poverty line. Considering that basic amenities like healthcare and education are not free, people spend judiciously on other requirements. Therefore, prices of products and services are sensitive to the dynamics of the market.
4. Keep long-term growth in mind
Entering the Indian shores to make quick money is a strategy that may not yield much result as the Indian market has a lot of opportunities but also offers a lot of challenges. In order to develop the right India entry strategy and comprehend the environment requirements, it is mandatory that the new entrant gives time even at the possibility of compromising on short-term gains. Growth and goodwill can only be earned in the long-term and with it, finances will flow.
5. Understand the law of the land
It is very important to pay due attention to the law of the land and seek legal advice before signing any papers. The Indian judicial system under the constitution of the country has a single integrated approach to state and union laws. There should also be provision for alternative settlement of disputes as the Indian judiciary has a backlog of cases and it may take money, time and effort to resolve disputes.
Contact us for more information on this subject or to know how we can assist you in your plans to enter the Indian market for setting up a company in India.