Incredible India – Massive potential untapped – Part 2
India has been dubbed ‘the powerhouse’ of the future. It is the second most populated country in the world and is projected to be the third largest economy in the world by 2050. Bearing these facts in mind, what is the potential for the cleaning industry in India and is it time for UK exporters to make a move? Ceris Burns, international marketing specialist for the cleaning industry speaks with Indian cleaning industry leaders to gain an insight into this rapidly growing market.
This is the second part of a two part article. Part 1 was featured in the January issue of Cleaning & Maintenance.
I have spoken to numerous companies who are interested in India but apprehensive about taking the first steps. What advice would you give to a British company keen to enter the Indian market?
Vinay Ruparel director at Jade Consumer Products advised the following: “Bureaucracy is deep in India. You will need to have a good Indian partner if you want to succeed. They will help you navigate the systems and processes in this country. There is a lot of guess work and very little transparency. And don’t think that because this is a densely populated country it’s a big market right now. The market is young and the percentage of the population that buys is limited.
Make sure you go slow, invest gradually and test the market. Adapt your plan as you learn and above all have patience. Allow time to be accepted and for it to work. If you try to bulldoze your way in you’ll come up against a brick wall.”
Hydros Jassem managing director of Oxygen Powered Fragrance Technologies agrees:
“Come here for the long term. There are no quick wins. You should expect to invest for a good five years or more. Make sure you look for reliable people who have international business experience.”
Pradeep Mehra CEO and managing director of Walsons HR Solutions added: “You’ll need to understand the market and adapt to its needs. While the Indian cleaning industry may be crying out for professional products and services, you can’t expect to come here without adapting your offer in any way. There is great potential for companies to do joint ventures, to bring in expertise and couple this with local knowledge. Many service companies over here want to provide high level service but they just don’t have the expertise.”
Which factors are most important in decision making?
Vinay Ruparel explained: “Cost and quantity tend to be the most important decision making factors. After saying this, companies do often want to procure professional quality products and services but find that they are not always available. If more multinationals enter the Indian market and bring with them quality and professionalism, buyers will be prepared to pay a premium.”
Do companies tend to work regionally or nationally ?
Some companies prefer to work on a regional or State basis in order to provide a more tailored, personal service. However, as Pradeep Mehra commented this is not always the case: “There is a shift for clients to look to national suppliers. They realise that by streamlining supply chains, better economies of scale can be achieved along with improved service, cost reductions and efficiency.”
Can you give me an idea of labour costs?
Hydros Jassem said: “To get a quality labourer you can expect to pay the same as you would back home. This is because often in India labourers give a poor level of productivity. A labourer in Europe would be four times as productive. In short, to achieve this same quality in India you will have to pay.”
Pradeep Mehra added: “A cleaners’ average wage in India would be £60 for a 26 day period. The cost to the employer for that individual including equipment use etcetera would be £100 per month.”
What about payment terms?
Payment in India is generally much better than you might expect as Hydros Jassem confirmed: “Payment is made within 30-60 days. Of course you need to choose your clients wisely and manage relationships effectively but as a rule companies in India pay more reliably than those in several other countries I could name. ”
In your experience what are the most effective methods of marketing in India?
Raakesh Malhotra head of business development at Forbes DMS said: “The most effective and important method of marketing in India is word of mouth. This is followed by communication in the trade press. Email marketing has also started to be used more but word of mouth and face to face contact is crucial. Relationships are so important in India. They may not always be totally ethical but are nevertheless needed to make deals happen.”
To discuss how your company could take advantage of opportunities in India contact Ceris at firstname.lastname@example.org
As published in C&M magazine February 2011