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Markets are different; just like people

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Let us say you met two people – one from Japan and another from the US. Would you greet them in the same way?

It would be very normal to put your hands forward and shake hands in the US but not in Japan. That is the degree of difference involved in interpersonal exchange between two people from two different countries, imagine dealing with the entire market.

Markets are wildly different. No two are similar and hence the insights to deal with one are completely useless when it comes to dealing with another. It is very important to have fundamental insights on the market in order to successfully undertake business in that market.

It takes time and a considerable amount of interaction (with the market) in order to be able to understand the underlying fundamentals and the dynamics of change that are prevalent in the market. This is the keystone to understanding how to succeed in the market.

A considerable amount of the startup movement in India is based on the trends that are prevalent in the west. This results in a lot of copying of businesses models that are practiced in the west.

I often speak to groups of entrepreneurs, building mobile apps, across the country. I usually undertake an exercise – I ask the group: how many of them have spent money to buy an app. Invariably, less than 10 percent puts their hands up. I find it amazing that these people, who have themselves not spent a dime on buying an app, are seeking to build apps that others would buy.

The western markets are extremely  consumeristic by nature. Therefore, consumers are more than willing to spend money on products and services just as long as they feel that they are getting some value from it.

This is not the case in India. As a consequence, turning apps into profitable businesses is extremely difficult in India. This is but, one of the examples of struggles caused due to the blind porting western concepts to India.

In fact, it seems that even the investors suffer from the same fallacy.

The fundamental issue here is that the Indian market is different from the Western markets. They are made up of different people need to be addressed differently. The nature of value creation that needs to take place in India to build a strong and valuable business is different from the kind of value creation needed to build strong businesses in the west.

Also, due to the lack of extreme consumerism in India, the time that it takes to build a stable and profitable business is much longer than in the west. This aspect is amply emphasised in the article referenced above as well. It is important to have patience and plan for the long term in order to build a business in India.

There are many areas, such as the sale of copyright or intellectual properties where western models do not play well in India. Selling digital content like music and movies is extremely hard in India; it is very difficult to make people see value in buying something that is so intangible. Even Apple prices Apple Music differently in India as opposed to the US, $2 per month against $10 in the US.

It is important to look at every market individually. Markets are made up of the people that are a part of it. These people possess a history, a culture, a language and an approach that is unique and needs to be appreciated. Spending time to understand how markets behave is one of the most crucial steps in building a business.

Don’t look at the successes in one market and try to replicate them blindly in another. If you have a successful business in one market, approach every new market as if you were starting a new business.