Would-be exporters to India need super-granular approach

Tuesday 31st July 2012

New Zealanders seeking export opportunities in India should hunt for small, manageable opportunities at first rather than try to take on the whole market of 1.2 billion people, says the ANZ Bank's chief executive for India, Subhas DeGamia.

Speaking to BusinessDesk on a whirlwind tour through New Zealand, the expatriate Wellingtonian who's headed ANZ's Mumbai operation for the last four years calls this approach "super-granularity."

"Do your segmentation. Pinpoint your target market to the highest possible level," he says. "Even in Mumbai, one target segment might be just 500,000 people in two suburbs."

DeGamia says when he first went to India, some 14 years ago, he assumed the country was a jigsaw puzzle that he would be able to work out how to solve.

"This was one of the biggest misconceptions. You realise this is a big puzzle where the pieces keep changing," he said. "You don't have to solve the puzzle, just the piece that you have, and you know everything about that piece. That's enough to lead to significant success."

While India had its share of current problems, with growth flagging to around 6 percent annually thanks to global economic conditions and weak local political leadership, the country remains in catch-up mode for modern infrastructure and its growing middle class and urban populations mean it will struggle for food and energy security.

"We have an ongoing mandate with a number of Indian companies seeking raw materials for supply in Australia, New Zealand, Indonesia and other parts of the region," DeGamia said.

He predicts also that mega-cities will create demand for recreational opportunities, such as theme parks, and for greater quality education and vocational training.

Despite endemic corruption, India had a stable banking system and a plethora of multi-national companies operating successfully.

New Zealand began negotiations with India for a free trade agreement after a business delegation led by Prime Minister John Key last year. Opportunities in food technology, especially logistics and reducing food wastage through spoiling, are identified as major opportunities.

The country is already New Zealand's seventh-largest trading partner, and materials prepared by ANZ for DeGamia's tour suggest both countries share a tradition of smaller scale family-owned businesses, despite major cultural differences and historical experience. The fact business is done in English makes it easier than China, although regulatory complexity is a key reason India ranks low for ease of doing business. That includes slower than usual payment, the ANZ warns.

Above all, ANZ advises that investing in India requires long-term commitments and an ability to enjoy India as it is.

"Commitment is very difficult if India is not enjoyed."

BusinessDesk.co.nz

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