Why should “later” be the better time to invest in India?!?
You may also be wondering whether now the "right" time for expansion into India. Or have you postponed this consideration for now? And if "yes", why?
In our consultations with (potential) customers, we often hear the answer: "Later - we're too busy at the moment, it just doesn't work out right now, etc." when asked about (sales) expansion to India. There are many reasons for not immediately entering the Indian market or intensifying our commitment there, but are they valid?
Secure competitive advantage through timely market entry
India is ideally suited for pioneer strategies and offers all the advantages of the first mover advantage such as the examples of the kitchen manufacturer Häcker Kitchens and the automobile manufacturer Skoda Car from the early 2000s Both brands were able to establish themselves early and simultaneously as absolute premium brands in the Indian market, although they were more in the middle segment in Germany.
But there is also a lot of cut-throat competition in India - especially in recent years. If India represents a "new market" for your product, it is crucial to invest at the right time and to occupy the vacant niche. If this opportunity is missed, the market will be occupied by competitors. You, as a later competitor, will have to fight against loyalty to a functioning system, an established brand, against certain consumer expectations, etc. The risk of corruption increases, as do your costs for the excellent marketing and above-average sales that are then required. As a result, your product is too expensive and therefore not profitable.
In individual cases, you can of course benefit as a so-called "early follower" from a market that has already been partially developed and optimize your investments in market research and product development. But here too, it is important to "jump on the moving train" as soon as possible.
Hesitation as a typical German weakness
Unfortunately, in our experience, conquering and securing market shares that have not yet been allocated is a typical German weakness. Many German medium-sized companies hesitate for too long and, for various reasons, put off the decision to develop a market in India. A few years later, they are surprised when their newly founded Indian subsidiary or their new joint venture cannot achieve the desired success.
“Mini-market check” for self-reflection
Based on our years of experience, we recommend that you ask yourself the following questions:
- What information am I missing so that I can now imagine a (sales) expansion to India? What is really stopping me from setting up sales and service in the new market?
- Which of my competitors are already in the market? Which ones are currently expanding there?
- What are the current import figures for my product/a competitor’s product in the Indian market?
- Are there already key projects?
- What do annual financial statements say about this?
- Can I identify “early warning indicators” that tell me that the right time has come and that I need to react quickly in order to (still) be able to take advantage of my opportunities? (e.g. suppliers for relevant parts of my products are increasingly moving to India)
