Opinion

Market entry challenges from an Indian perspective – An interview with Mr. Gaurav Sharma, Associate Vice President, Tecnova India Pvt. Ltd

Foreign players have always found it exciting to be a part of the Indian growth story. With India poised to become the third largest economy by 2020, nobody wants to miss the bus. Though India is teeming with opportunities, there exist roadblocks for new firms, especially from foreign soil to setup their businesses in India. Providing valuable consulting becomes imperative for them to understand the pulse of the market and position themselves accordingly.

TECNOVA is a management consulting firm, specialized in designing 'India entry strategy' for international players and have worked with some of the leading brands from across the globe across 60 industries. In an exclusive interview with TradeBriefs, Mr. Gaurav Sharma, Associate Vice- President, Tecnova India Pvt. Ltd talks about market entry challenges from an Indian perspective and how foreign firms prepare themselves for the tough journey ahead

1. Retail seems to be the buzz word today. From FDI to organized shopping to entry of premium and luxury brands, how do you see this industry growing?

Indian Retail market is one of the most dynamic one's globally and is set to see huge realignments in coming 2 to 3 years. Opening up of FDI, increasing purchasing power, deeper penetration of various retail formats to tier II towns and friendlier Government policies make India an attractive destination for various international brands.  Tecnova saw entry of over 100 retail brands in past 2 years - Tecnova which specializes in cross-border market entry strategy, has helped the likes of global luxury house LVMH, Christian Louboutin set up shop in India.

When we talk of retailing, Food & Beverage, Fashion & Lifestyle, Home décor & furnishings, and Consumer Durables retail would see a boom in next 5 years. We see big ticket retailers from Americas and Europe to the likes of Walmart, IKEA, and Pavers interested in India as a location.

The retail sector in India is growing at a phenomenal pace; today India ranks 5th among the top 30 emerging markets for retail. It is estimated that the retail sector would continue to grow at 10-12 % per annum, which is extremely encouraging when the country's economy is projected to grow at 6% in the coming year.

2. What, in your opinion are the major roadblocks for a foreign entity to set up shop in India?. Especially after the GMR debacle in Maldives, do you think foreign players have become vary of south Asia?

The case of GMR in Maldives highlights an important issue of political stability in Development Economics; we saw a change in Guard in Maldives reversing the decision of the previous government. In India and other economies of South Asia this is a rather rare possibility, since the Government in these regions are stable (Despite of significant policy paralysis) and more development oriented, moreover the policy decisions are mostly never reviewed in Retrospect.

3. People opine that organized retail is a long term game. How patient/prepared are foreign players to stand a dynamic Indian market?

Establishing retail market in an organized format demands time, consistent effort, parity of operation among brands, strict monitoring by the Governing body and many such similar disciplined initiatives. Indian retail market still has a long way to go to become a 100% organized market place, yet the pace at which it is growing is very attractive for numerous international players. They do not want to lose on the current boom and hence are venturing into the market right away, to ensure minimization of risk and for ready acceptability, majority brand enter through tie-ups with Indian players. This approach lends more security to international players and a deeper consumer understanding ensures enhanced patience to sail through the dynamism of the market.

4. Apart from outsourcing, Infra and retail, what would be the next big wave in foreign investment in India? Which part of the world would be the next big investor in India?

Sectors like: Insurance, Banking, Oil & Gas and Defence are next in line to be opened up to foreign investment. The next big investors could well be in South Asia, China and Russia as American and European Economies are hit by slowdown.

5. How challenging is it to work in a country like India with its lax policy making?. Does that deter your clients motive to invest in India?. How do you tackle such challenges?

Policy Paralysis is very much a reality in India, the decision making is considerably slow. However, the size and scale of target consumers in India, makes India a favored investment destination for many retailers and FMCG giants. We saw retail giants like Walmart lobbying for over 10 years to get multi-branded retail into India.

You can check out Tecnova website here - http://www.tecnovaglobal.com/

 


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