Doing business in India featuring Molecular ProductsSeptember 2015 | Growth Capital Stories
Careful preparation is key to doing business in India, explains CEO of Molecular Products Ian McKernan.
It would be easy to make the wrong assumptions about India.
Arriving in the country is certainly an assault on the senses – I once arrived in the middle of a festival marked by two days of fireworks – and the sense of chaos can be overwhelming. But while it takes time to adapt to the noise, the unfamiliar smells and the sheer volume of people, you quickly realise you’re doing business with very smart, professional people with a tremendous work ethic. Plus they have outstanding language skills that can help you break down barriers rapidly.
Over the course of several different trips, I’ve spent four or five weeks in India during the past three years, travelling between Mumbai, Delhi, Bangalore and Hyderabad. I’ve generally hired a driver to get me around the cities, but as my level of familiarity and confidence has grown, so too has my sense of adventure and exploration. A ride through an Indian metropolis via tuk tuk is not for the fainthearted!
And it’s not just during down time or on days off that a sense of exploration is important in unfamiliar territories. It applies in business too. At MPG, we have always taken our time to robustly assess the strength of the opportunity before moving into a new market. That means spending time in the country.
On paper, the move into India made perfect sense for us. We’re an international business that makes oxygen devices – everything from the devices that remove carbon dioxide from patients who have had an anaesthetic to those that provide an emergency oxygen supply to military submarines. Our three key markets are healthcare, military and industrial safety so we look for geographies where those sectors are both established and experiencing growth.
India absolutely fits that strategy – it has a large population, including a growing middle class with increasing affluence; it has a rich and diverse manufacturing base; and, we had already won some contracts for military and security work in the country.
For all the theoretical attractions, however, we knew we wouldn’t be able to make robust investment decisions without getting to know India on the ground. The diversity of the country is part of its appeal, but it makes life challenging for newcomers.
What really helped us is that our bank, HSBC, had valuable trade contracts in India while UKTI (www.ukti.gov.uk) was able to introduce us to the right people in Indian government.
Our conversations with those people over the course of several trips enabled us to develop our plan for expansion into India. In June, we hired a local consultant on a one-year contract to develop a marketing study and a short-form business plan. We wanted a local person who knew their way around – so we decided against putting one of our own people on the ground – and we were able to find the perfect candidate with the help of the UK India Business Council (www.ukibc.com). It has offices all over the country, supported by the UK and Indian governments, and its officials helped us develop a job profile and find potential candidates. I then interviewed them over the course of three days and we made the appointment during my last visit in June of this year.
This National Programme Manager – Vikram Pital - is actually employed by the UK India Business Council on our behalf. He works from a UKIBC office and is able to exploit the organisation’s network of contacts – it’s a great way to build our presence locally and to generate awareness before committing to a full time presence and the expenditure that it requires.
This is definitely a market in which working with local businesspeople is invaluable. Business can be bureaucratic in India, particularly where you’re dealing with state and national government and if you don’t have someone who knows how to operate within the system, it could be frustrating.
We expect our patient and considered approach to really pay off over the longer term. There is an exciting level of demand for many of our existing products but we also expect to be able to develop variations of those products specifically for the Indian market, which is large enough to support that more tailored approach.
I’d definitely advise other companies considering India to tread cautiously – the work you do upfront is really important because it’s very easy to overestimate the size of the opportunity, especially given the media hype about the potential of India. For many companies, India will prove to be an exciting prospect, but you can’t know that for sure without spending time here and doing the research to support your investment of time and resources.
I’ll be going back before Christmas to see the progress that Vikram has made on the business plan. I’m already looking forward to it, though if I had one further tip for others doing business in India, it would be to expect the unexpected, especially when it comes to travel - let’s be honest, there aren’t too many places where your taxi might get stuck behind a pair of elephants on the way into town! That said, when you have successfully navigated the unexpected, a highly motivated and professional community of business people and government officials with real appetite to trade with UK companies awaits you.
Ian’s five top tips for doing business in India
Do your homework – the headline numbers are impressive, but is this really the market for you?
Get to know the country – India’s states are hugely different from one another and certain parts may be more attractive to your business than others.
Use your contacts and ask for help – Britain has fantastic networks within in India, both in the public and the private sector, take advantage of them. http://www.ukibc.com/
Work with a local – someone who knows how to navigate Indian bureaucracies and the nuances of doing business there will prove invaluable.
Bring a sense of adventure – Indian is an incredible country but it can be overwhelming if you’re not ready to embrace vibrant local culture.