MARKET ANALYSIS FOR PRACTICE – Part 1: How big is the Indian market really for my company?

Where official market research ends, real market research in practice is just beginning.

Like a common thread, one question from foreign companies always runs through all areas of their activities in India: “How do I get reliable information for my company?” And like a mantra, we can only give the following answer based on our many years of practical experience on site: “ “Just through the right networks – formal and informal.”

The difficulty of formal sources: official market studies, industry reports, economic reports

Unlike a few years ago, both national and international associations and institutions regularly publish market studies, industry reports and economic reports on the Indian market. Although this data on growth rates and the absolute market size gives you an initial assessment of the general market development in India, it does not provide a reliable basis for decision-making regarding the individual market potential of your company in particular. Specialist literature, lectures, the many information events in Germany, participation in general delegation trips or even visiting a trade fair on site are often not helpful. 

Likewise, you will not receive a realistic market assessment from your current or future Indian partner or employee or from market research carried out on your own behalf, because the information obtained in this way will - like all information in India - be personally colored.

In order to obtain a realistic, objective picture of the potential, environment, competition and the relevant framework conditions for your entrepreneurial commitment, market information must either be obtained from independent third parties who “listen” into the market for you, or you must be put in the position to establish the right access to the relevant decision-makers in the Indian network, i.e. to identify and address the potentially most attractive “key accounts” as well as the most important sales intermediaries at decision-maker level and to generate “good-will”. 

Expert interviews as an important standard tool

An important tool for market research and analysis is still the first step of conducting so-called expert interviews – i.e. the systematic approach of industry experts, competitors, associations, sales intermediaries, employees, potential customers and suppliers to obtain relevant information.

The data obtained in this way must of course be critically examined in the next step and validated using other sources.

Useful instrument: Market research trip to India

In a country where decision-making hierarchies are much more pronounced than in Germany, but at the same time the number of significant players in the relevant industries is very small, conversations at the “right” level are even more important. Here, too, you could try to establish contacts yourself through emails, calls, letters and trips to India. But experience shows that you will not be able to do this, or will only do so with a considerable investment of time and money.   

Many German companies therefore repeatedly experience that access to the relevant network is only possible if access to the “real” decision-makers on site can be established in advance and you then meet with them in person and discuss your own company and products can imagine and position. 

Another excellent component for obtaining information is therefore Market exploration trips, which enable you to come into direct contact with local decision-makers and get a personal overview of the Indian market. After every market research trip we carry out, our customers tell us that it was an important building block for their future strategy decisions.

Use our long-established “market exploration trip” service to be able to assess and realize your market opportunities yourself. [See also: Market exploration trip]

The success of such a trip is not reflected in the sheer quantity of sightseeing appointments and personal conversations; it is rather their quality that is crucial. Are you in the “right” places for your company, are you really talking to the “right” contacts, are you even being shown the important places, etc.?

Even for companies that have been based in India for a long time, a neutral market research trip can provide important and new insights.

Critically question advertising promises

Be alert when (Indian) consultants or consulting companies offer you market research at noticeably low prices, for which they promise to speak to an exorbitantly high number of supposed experts / companies / service providers. The likelihood that these contacts are relevant to your specific company is extremely low and the information obtained in this way is, at best, irrelevant.

Always critically question overly positive praise from your counterpart. [See also: Your Indian Business Partner: Valuable or Just a “Bollywood Relationship”]. As is so often the case, particular interests in the competitive Indian labor market can again come to the fore here.

The advantage of informal sources: relationship level as the most important door opener

Apart from the official protocol of meetings and negotiations, there is always an unofficial channel of communication between Indians of the same rank. On the basis of a solid relationship level, there are no secrets in India. Both the positive sides of curiosity, such as the thirst for knowledge and research, as well as its negative sides, such as indiscretion and sensationalism, are characteristics that you often find in India. Sensitive information is always passed on from managing director to managing director, project manager to project manager and also from driver to driver in mutual trust.

The extended family as a source of information

The same applies to family structures. Within the typically very large families in India, there are of course very well-founded networks with an excellent flow of information. Find out who the real decision-makers are in the family and in the family business - both informally and who is officially registered as a “director”, for example.

Even in exclusive clubs or associations such as “Rotary” there is an informal exchange that goes beyond the official protocol and provides valuable information.

The “Power of the Servants”

The so-called “tea boys”, “office boys”, security guards and other subordinate employees also play an important role in obtaining information, especially for expats. Such a so-called “messenger” has numerous points of contact with different hierarchy levels.

Interestingly, despite their constant handling of sensitive data, these “messengers” are usually left out when it comes to the topic of “non-disclosure” or the handling of sensitive documents. Experienced managers in India will confirm to you how easily you can obtain confidential data such as tax records, personnel data, contracts and other company documents - beyond industrial espionage, of course.

Summary

Useful market research trips, interviews with relevant decision-makers on site and, in particular, clever and systematic networking enable you to obtain reliable information about your individual market opportunities. Therefore, in India, always invest more time in the relationship level.

Would you like an honest assessment of your market opportunities? Do you have questions about the realistic market potential of your company? Do you want to know what the sales opportunities for your product actually are? We would be happy to help you.