S African firms highlight Indian market trends
Himalayan News Service
Johannesburg, July 21:
A booming retail sector, the vast rural market and red-tape are some of the positives and negatives of the Indian business environment, say South African companies doing business in that country. Representatives of the companies said that for successful operations in India, special attention should be given to understanding the culture and work ethic there — all of which is very different from that in South Africa. Delegates of companies ranging from breweries and toll roads to insurance and fertilizer shared their experiences in India at a seminar organised here by the Gordon Institute of Business Science titled “Competing in India”. “The compounding effect of GDP growth of five to seven per cent cannot be ignored,” said Richard Rushton, managing director of Shaw Wallace, “The retail sector has started to explode and, as a result, consumption-led demand is growing the Indian economy. Rapidly changing urban lifestyles is leading to consumption of brands on an unprecedented scale”.
Rushton cautioned against what he called “passive involvement”, something echoed by other speakers, who said a great deal of patience and deep understanding of the way Indian business generally operated was critical for success.
The bureaucracy in the government, especially in the regulatory environment in India, came under fire from several speakers who said regulatory management needed to be factored into business plans. Julian Thomas, commercial director of Intertoll, which is currently working
on five toll road projects in India, said Indian customers were very conscious of value for money and would undertake intense scrutiny of any value proposition. “If you are serious about the market, put an employee in India fulltime from early on to give you a better understanding of local conditions,” said Thomas. Andrew Cartwright of insurance giant Old Mutual reflected on the joint venture with Kotak Mahindra, “Insurance in India is in a time warp.” But Cartwright said the opportunities created by the massive rural market for insurance in India could be well exploited if a trusting relations hip could be developed. While Old Mutual had achieved success with its Indian partner in the banking sector, Nic Kohler of Hollard, another South African company, admitted that it had been less successful initially while the company was getting to know the market. Former trade unionist Jayendra Naidoo, who teamed up with former telecommunications minister Jay Naidoo to form Consilience Technologies, told of the success they had achieved in partnerships with Indian companies in several areas, especially, IT and pharmaceuticals.