Business and Social Media in India. Anyone ? [kwiqq]

Posted on | March 4, 2009 | View Comments

British SMEs thinking India

Chinwag along with UKTI (UK Trade and Industry) hosted a very interesting event yesterday: Digital Business India. The aim of the event was to get UK business consider expanding overseas to India. I went along as a guest and spent most of my time exploring the opporutnities.

UK Businesses in India

It seems to me that many British businesses both SMEs (Small and Medium Enterprises) and large business  are already based in India. Mainly to cut costs, be competitive in the global market and expand into the 1.1 billion (people) Indian market. The speakers were quick to point out that the Indian market is price sensitive but their are opportunities to sell commodity in bulk. It is also the second fastest growing economy over the last 15 years and destined to be the third largest economy by 2040 there are long term investments to be made in India.

How to penetrate the Indian market

Although the question I was asking myself was, what are the opportunities for British businesses in India and how to approch it. The conversations I had with some businesses was that the cost of building stuff India could rapidly rise due to management costs. Some companies felt that micro-management of staff is essential to make things cost effective. Although with 5 hour time difference that could be an issue for British businesses. The most successful Indian expedition for British businesses were JVs (Joint Ventures) or Partnerships. These JVs were typically struck with Indian businesses who had greater penetration and understanding of the area companies wanted to be placed in. Shefaly Yogendra , India/British Strategy Consultant, felt that this requires a company to conduct their own research, travelling to India in search of a partner.

UKTI (UK Trade and Industry)

UKTI‘s support sounded very encouraging. I felt they were already making a real difference to Brit-Indian trade relationship. UKTI’s Stephen McGowan announced some schemes like the Export Research Marketing Scheme which pays 50% of company’s research budget to explore business opperunities in a foreign countries. Stephen also promised to organise a Digital Mission to India like the one organsied by UKTI/Chinwag for the United States in the next 12 months. It is a big commitment and I’m glad that UKTI is committing their 100%.

Opportunity for Social Media

Given the technology talent in India could be decieving. It might feel that given the understanding and technical expertise most of the social media already exists in India. Although very soon one realises that actually the penetration is minimal. Mainly becuase the business models for social networks is not very obvious. Advertising is not as lucrative as it is in the West. Not many people buy things online, more over even major corparations are not really tracking referrals from other sites. Good example was Faisal Galaria, MD of Kayak.com explaining why their business was not getting a commission from Indian Airlines:

So social media sites like Facebook will struggle to make money. Although there are deals to be struck in the mobile space given the uptake of mobiles: 10,000 mobiles are sold every hour. Also outsourcing work to India could be an effective cost cutter during these hard times but required effective management and good specification.

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