Planning to Enter Indian Market? Here's Why You Should Opt for a Partnership
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India has become an all-time favorite destination for global companies who are looking to expand their footprint and create lasting business success. In the current scenario, strategic partnership with a local company seems like an ideal way for international giants to enter the Indian market. Also, since the local player has a better understanding of everything from current market to sourcing to real-estate and pricing.
Hello Network, the social media platform launched by Orkut founder, Orkut Buyukkokten, joining hands with digital innovation company JetSynthesys serves as the most recent example of this common trend ruling the Indian business landscape.
Under the strategic partnership, JetSynthesys as a local partner will be responsible for larger business strategy and operations, marketing and monetization for Hello to strengthen its reach in the Indian market.
Entrepreneur India spoke to few industry experts to understand why the partnership with an Indian company is the ideal way for global companies to enter the Indian market.
A Win-Win Situation for Both:
Indian Economy is buzzing and witnessing a growth trajectory which no other global economy is able to compete with. Arpit Jain, Founder and Managing Director of Auraine Botanicals, feels it’s natural for all global big brands and organizations, likes of Apples and Amazons of the world, to eye India as their next big target market. And hence, India is witnessing an influx of global brands entering India through Joint Venture partnerships with Indian companies.
“Partnering with an Indian Company is a win-win situation for the both, as they exchange more than business and profits, the alliance goes on to further amalgamation of technologies, ideas and business relations, ensuring business grows faster and monies are spent more on marketing and consumer awareness of the product and brand rather than on setting up infrastructures and systems,” shared Jain.
Drive Brand Awareness:
Global players do bring in great products and services, capital, and domain expertise, but often lack the brand awareness as well as distribution and local regulatory relationships, all of which are important to navigate and succeed in the complex Indian market.
Ashish Sharma, CEO, InnoVen Capital believes this is why strategic partnerships are increasingly becoming the preferred approach for many global companies to enter the Indian market, as it allows them to test the waters without exposing themselves to significant risk.
“While we have seen several successful partnerships in sectors like Insurance, Financial Services, Airlines, Manufacturing, there have also been some break-ups in sectors like Retail, Telecom, FMCG, Auto etc. It’s important that global players are thoughtful in choosing the right partner, and evaluate every association on parameters such as cultural fit, stakeholder expectations, and governance in addition to the commercial terms,” said Sharma.
Adapt to the Indian Consumer’s Demand :
Gaining access to Indian markets requires an intense and concerted effort. Global companies need to make a commitment to the Indian operation and to localize and empower it. Sanjay Jhunjhunwala, Member Products Director, EO South Asia suggests that global players must adapt to the Indian consumer’s demand for innovative, low-cost and high value for money products.
“Change in perception about doing business in India is the foremost aspect that global companies should focus on. Trying to fit a global business model in the Indian context may not yield the desired results and may even prove to be counterproductive, as India offers a very diverse consumer base with unique requirements. The key, therefore, is to formulate a business plan as per the local market, retaining the value proposition of the global business model,” said Jhunjhunwala
He went on to say that for entry into the Indian market, it is essential to identify the target market and find good partners who know the local market well and are completely acquainted with procedural issues. Additionally, empowering the Indian partner and involving them in the decision-making process is core to establishing a successful business in the country.
“Often multinational companies get caught in a tug-of-war for control with their Indian partners. What is important to understand is that for doing business in an ‘Indian way’, one needs to involve the local partner in both formulating long-term strategies and taking key operational decisions,” he concluded.