Daily Archives: February 15, 2011

Is The New India Greedy?

Some of the greediest business people that the doctor knows, especially in sales / marketing / business development roles, are Indian, but I’ve never looked upon India as “greedy” compared to, say, us — especially since these individuals often have a generous side where friends and family are concerned. But a recent article over on BBC News on the good, bad and ugly of Indian life seems to suggest that, in the New India, greed is good.

I know India faces greed from the west (led by the good ol’ U.S. of A.), the east (in China where greed allows you to be creative in business and put melamine in the milk, lead in the paint, and diethylene glycol [antifreeze] in the toothpaste and be seen as a successful business person who should be admired), and the north (led by the U.K. and a few of its money-grubbing European neighbours), but I had hoped it would hang on to its Gandhian heritage with dear life and balance the need for greed with the desire to make the (business) world a better place.

The article notes that when the head of the government’s main anti-fraud body, Pratyush Sinha, retired last year, he estimated that one in three Indians is corrupt. I know bribery is rampant, but that’s just the way business was done for a long time. People were underpaid, so if you wanted something, you paid a bribe. It might not be “ethical” in our world view, but at least when you paid the bribe, something got done. (And most of the time, the bribe was just to facilitate a legal service.) Here, you pay a service fee and wait to see whether or not a government worker will get around to your paperwork. He also said that “When we were growing up, if somebody was corrupt, they were generally looked down upon. There was at least some social stigma attached to it. That’s gone now. There’s greater social acceptance.”

According to the author, Pratyush was right. Recently cabinet ministers, wealthy businessmen, members of the armed forces, and politically well-connected organisers of the Commonwealth Games have come under the microscope. According to the author, one day his morning paper ran five different major corruption stories on its first eight pages. And now, even Ratan Tata, is speaking of the dangers of a “banana republic”. It doesn’t sound very positive. We certainly can’t wait for a commission of inquiry lasting 20 years. What do you think? Is it a short term blip or a long term problem? And if the latter, what is this going to do to your supply chain? India is already one of the most expensive countries in the world where logistics is concerned due to its bad roads and lack of airports. The last thing you want is greed in this industry.

Dell’s Guide to Growing in India

In four short years, Dell has risen to become the number one supplier of desktops, laptops, and notebook computers in India, going from sales of only 79,244 in 2007 to over 1.1 Million in 2010. This is more than HPs market share of 1 Million and Lenovo’s market share of about 600,000. So what did Dell do to rise to the top, acquiring year-over-year growth of 55% along the way? This recent article in Fortune on how Dell conquered India provides some interesting insights.

So how did Dell do this?

  1. They set up a factory in India.
    This cut local delivery time by 50% while improving profitability.
  2. They changed the model.
    While online worked great in North America, exclusive outlets worked much better in India. Once a customer selected a product, it was then delivered to their door (which saved on warehousing costs).
  3. They borrowed from the insurance model.
    Rather than use the established national, regional, and local retail distribution model, they determined that the insurance model fit best with their exclusive outlet / build-to-order strategy and used it instead.
  4. They extended the on-site service model to small businesses and retail customers.
    This gave them an edge over the competition.
  5. They built a core team in India focussed on growth.
    They were sure to recruit the best not only from other Dell international divisions, but from rivals (like HP and IBM) and retailers (Unilever, Whirlpool, and Airtel) who had experience in the India retail market.

In otherwords they:

  1. Established a local presence,
  2. Adapted to the local retail market, and
  3. Handed the reigns over to a team that understands the Indian marketplace.

While it will take a lot of work to brew up this recipe for success, it’s not a hard one to understand. To do well in a region, whether you are buying or selling, you need to go local, adapt, and work with the right partners who understand the region.