Partnership key to Indian success
India is a technology market like no other. Kiwi companies who rush in and try to go it alone are setting themselves up for disaster.
Because things work differently in India.
Products that sell well in Western countries can crash and burn in a country where labour is cheap, growth rates are booming, and the biggest companies are 50 times the size of a large New Zealand firm.
The right connections are important in any country, but in India, who you know is all important. The people who run companies are much more involved in day-to-day business than in Western countries, so its crucial to get contacts at the top.
Hamish Coop, head of CMCTec - Massey Universitys joint venture with Indian IT firm CMC - says the cult of leadership is definitely stronger in India than New Zealand.
Unless you have the CEO or the CEOs right hand man or woman interested in what youre doing, its a real, real struggle, he says. The behaviour of staff is very much linked to where the CEO is focusing and what the CEO is demanding.
Government organisations such as Trade and Enterprises Beachhead programme can play a role here. Part of the programme allows Kiwi firms cheap office space in countries where they want to export, but its the face-to-face time these organisations can arrange with CEOs that is more important in a country such as India.
This can range from formal business meetings to boxes at the New Zealand-India cricket matches, set up and paid for by the government. In India, this is the way business is done, and the way to win deals.
Another way to get these connections is by finding a reliable, ambitious and knowledgeable Indian reseller.
Auckland cinema software developer Vista has taken this approach to heart. Since 1999 it has been working closely with Indias Bigtree, which resells, supports and customises Vistas product across India, Pakistan, and the Middle East.
India is a good market for Vista to enter because the countrys cinemas are making the switch to digital systems from paper-based ones, and its one place where many new multiplexes are still being built.
Bigtree chief executive Ashish Hemrajani says five years ago there wasnt a single multiplex in the country. Today there are more than 100, with more than 400 more planned by 2010. About 2500 of its approximately 8000 single-screen cinemas are due to convert to digital too.
Vista chief executive Brian Cadzow says Bigtree has been the key to its burgeoning success in the Indian market. Theyve really gone into it with a passion. Thanks to Bigtree, Vista is in 35 cities in India, with about 80 per cent market share, Mr Hemrajani says. Prospects for growth are good. As Indians become more wealthy, they will likely go to cinemas more often, he says, because of Indias culture.
The country is quite dusty and hot, and many people dont drink alcohol, so the cool interiors of movies are a natural escape.
If you go to the small villages there is also nothing else to do but go to the movies, he says. Mr Cadzow is also optimistic, predicting revenues from India will triple in three years time.
FINDING the right partner takes time and money. Its even better if the right partner finds you, which is exactly what CMCTec is meant to do.
CMCTec joins up New Zealand companies with CMC. It allows CMC to quickly find products it can sell and support in India and globally, while letting New Zealand firms enter the market with much less risk.
It is currently working closely with a handful of New Zealand firms including Wellington human resources software developer Sonar6, Christchurchs Jade Software, and Auckland anti-spam firm SMX.
CMC chief executive Ramanathan Ramanan says the plan is to use CMCs software as the core offering, and sell Kiwi-made products as add-on plug-ins.
With several pilots running, he is optimistic about the prospects and expects to take several Kiwi-made products on to the global stage within a few years.
Mr Ramanan is sceptical that foreign firms could crack the Indian market without the on-the-ground knowledge and connections of a good partner.
The ones that partner are the ones that ultimately succeed.
The partners involvement doesnt have to stop at just finding and supporting customers, either.
Bigtree has also developed two modules for Vista that the Kiwi company now sells across the world, and Mr Hemrajani believes Vista should outsource even more of its work to Bigtrees 350 staff.
For the same price that you get one person in New Zealand, you can get five people in India.
Well let them approach the rest of the market much faster. Local partners are also the best way to deal with the grey areas in Indian government and business.
Mr Hemrajani advises Kiwi firms to make many trips to India before signing a partnership deal. New Zealanders need a better understanding and appreciation of the country.
Reuben Schwarz travelled to India as the recipient of the NZTE Qantas Media Award.
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Thursday, January 31st, 2008 at 6:07 pm under