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Business success in India: overcoming common pitfalls

A growing economy, population, and middle class make India prime pickings for companies looking to expand into new markets. 

The country’s unique business environment, however, can often lead to newcomers feeling daunted and challenged by common issues. None of which are insurmountable nor should deter exporters from entering and thriving on this lucrative market. 

Here are 6 common issues faced by foreign companies in India – and 6 ways to overcome them.

Challenge: Strong price competition 
Solution: Compete on quality instead

A large proportion of India’s imports come from China – 16% – and most of this is aimed at the low-price points. For other firms selling to India, emphasising the quality of your products and clients’ longer-term cost savings would be more beneficial.

Challenge: The market is unaware of high quality products 
Solution: Spread the message

Internationally-made products can often solve problems that local suppliers can’t, but companies operating in India need to make a big effort to ensure their potential customers know about it.

“We are looking to convince civil engineers of the benefits of high quality PP products,” Belgian Fibres told us. 

“We are opening their minds that price isn’t the biggest factor, quality products will offer a long term better result, quality has no price. We need to take the time to convince the market about the long-term benefits of the product.” 

Challenge: India is huge 
Solution: Recruit multiple distributors

Recruiting multiple distributors is essential for promoting to all regions effectively. One distributor operating from a major city will not be enough to reach India’s huge and diverse market.

Challenge: Small businesses may expect credit 
Solution: Find a partner willing to provide it

Either take the price hit in the early stages or partner with an Indian distributor willing to be more elastic in their financing.

“Most products are sold on credit and you get the money after a month or 60 days, but European companies are not comfortable giving credit to unknown people. For us, however, we know the market and people in India so we can give the credit. We can leverage risk, so can take a risk with new customers when we have a high proportion of customers we know. We know where and how to do the sampling,” explains Maris Polymers, Greece.

Challenge: Existing market players are well established 
Solution: Persevere

Cracking the Indian building market won’t happen overnight. It could take several years of research, networking, exhibiting, selling, and educating the market to get a foothold. But once that happens, the demand is huge and the initial costs can be easily recouped.

“It takes a long time to start business but once you start you can make a very good profit as the country is huge and there’s a lot of people with purchasing power,” reports CzechTrade, Czech Republic.

Challenge: High shipping costs 
Solution: Absorb the cost or manufacture in India

There are several solutions to this issue. One is to simply work the costs into the export plan – shipping rates are still low thanks to vessel oversupply, so this option is more viable than it was previously. Another is to manufacture in India – but this requires a large initial outlay. A third is to find a partner in India willing to manufacture your products and distribute them from India – but this requires care that standards are upheld.

We’ve covered the solutions to common challenges, now find out more about the business culture in our Guide to doing business in India and 6 excellent tips for sure-fire Indian trade show success.

If you’re looking to tap into the Indian market, meet India’s buyers and specifiers at WorldBuild India 2018, India’s key B2B exhibition for the building industry. Enquire now to secure your place.


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