In the course of our study India business climate index we examined how the sales of German companies in India developed over the past two years.
Sales in India grew slightly
According to the results of our survey, 22 percent of all (141) companies surveyed have seen their Indian business grow significantly in the last two years; 41 percent described the increase as at least “slight”.
In contrast, 10 percent of companies experienced a “slight” decline in sales in India over the same period – and 3 percent even experienced a “severe” decline.
For around one in four companies, their Indian business remained more or less the same.
On average, the German economy's sales in India have grown slightly in the last two years. Two out of three companies in India are generally on a growth path, but at least 13 percent of companies are clearly struggling.
Not explicitly addressed in the study, but because the question has been asked several times, we would like to briefly analyze it here: How do companies with different forms of presence differ in sales development and business success?
Better to travel in India without a local partner..?
To do this, we compare the sales figures of wholly owned subsidiaries (including liaison offices and branch offices) and joint ventures with those of companies that are active in India with sales representatives or export directly, and come to the following results:
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According to these numbers Companies that are active in India without a local partner perform better in terms of sales development as companies that work the market with an Indian partner (joint venture or sales partner, sales agent, etc.):
- 74 percent of companies with wholly owned subsidiaries et. al. in India have recorded strong or at least slightly increasing sales in the last 100 months. 24 percent of companies recorded declines in sales. (The remaining 12 percent reported consistent sales)
- German companies that deliver direct exports to India did not grow quite as dynamically on average, but only had to accept an 8 percent decline in sales figures.
- Only every second German-Indian joint venture has been able to increase its sales in the last two years.
- Only companies with local representatives performed even worse. Only 41 percent of companies with local representatives were able to increase their sales. More than one in four companies even suffered a loss in sales.
Challenges when working with Indian partners
The intention here is not to give the impression that “the Indians” are per se responsible for a lack of sales success. At this point we would simply like to make you aware of a few typical (culturally determined) phenomena or symptoms (further links cover these topics in detail):
- No direct access to the customer
- Lack of transparency in the business conduct of the Indian partner
- Poor access to truly objective market information
- Insufficiently trained sales and service staff
- No systematic market cultivation
- Limited control over local activities (including in your own joint venture)
- Little influence on the (marketing) strategy and thus on the fate of your own brand in India
- Cultural differences, making it more difficult to manage and control your “own” sales in India.
- Lack of ability of Indian partners to compromise
You can read more information about these possible phenomena in the articles linked above or in our current study.
