Archives for posts with tag: アショク

The Schumpeter column in the recent Economist, “Mammon’s new monarchs” describes the emerging world consumer as king. It seems that Western companies are interested in knowing how to appeal to emerging world consumerism and compete with home-grown domestic rivals. Consultants from Boston Consulting Group (BCG) advise companies to jump in early. I agree that going in early can be useful, but according to my observations, this is not essential nor a panacea.

honda-city

Consider the automobiles industry – Honda started early in India, in 1998. Toyota started shortly afterwards in 2000. Their early start has certainly helped. Honda’s City and Toyota’s Innova enjoy stable market leadership in their respective segments. Though many thought Renault-Nissan to be a late entrant to India (over a decade later than Honda), given that automobile ownership is still at the lower tail of the S-curve, it still has potential to emerge a winner. Renault is already doing well with its Duster shining in the market this year.  The same applies with Volkswagen, which really kicked off with the Polo in 2010. So, coming in later, even a decade later can be okay. On the other hand, in the absence of quality offerings, coming in early is not a cure-all as Fiat has failed to learn in repeat attempts at conquering the market.

Similarly, in the appliances arena, Hitachi that started early in the upper end high quality air conditioner segment, continues to enjoy aspiration status. Panasonic that is just starting its big bang could yet do well. LG may have made early inroads, but eventually quality shall become the priority of the consumer. Already, at the “non-frugal” end LG finds it difficult to attract the well-to-do. Experience with air conditioners also demonstrates that starting early is fine, but quality is perhaps more important.

LG

My own feeling is that when deciding market entry into emerging Asian economies, companies shall do well to concentrate on two things. Firstly, they need to get the price point right and match local tastes, while matching the quality expectations. This is where Hyundai succeeded with Santro. The second point is to focus on a core competency. So, for example, Daimler Benz did well to first start with its Mercedes E-class, a core competency yet economically right for India. It’s A-class is only now being contemplated, over a decade later (the price point is no doubt more suitable, but not what Daimler is more commonly associated with).

Many people try to bring out a single point solution, such as “start early”. This pithy advice can result in disasters as the Fiat experience in India demonstrates. Instead, international business strategy needs to concentrate on what sells (the buyer’s desires), and what can be sold (the seller’s competency), which are perhaps more important to conquer the Asian consumer.

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Last week I was invited to the Embassy of Japan in Delhi for the pre-launch reception of Suraj – The Rising Star. What is that? Exactly the question I asked my wife when she told me we were invited. Now I know the answer – it is the title of a cricket based cartoon, inspired by the Japanese baseball anime hit Kyojin no Hoshi (Star of the Giants) of yesteryears.

kyojin-no-hoshi

Many years ago when I was in Toyota, I was asked to review the Japanese program Oshin for possible sponsorship to telecast in India. Ambassador Sakutaro Tanino had been approached, because it seems that Oshin was run once, to popular acclaim, but could not finish as a series for lack of funds. Sponsorship for Oshin was never revived, but since my review work I have been convinced that quality Japanese programming could be well received by Indian audiences.

In my previous entrepreneurial business promoting Indo-Japanese cultural and business relations, I often shared opinion that it would be people to people contact that would get the two nations closer. There was talk even then, about 10 years ago of translating Japanese Manga (comics) to the vernacular. Now Kodansha, the Japanese publisher has made the localization happen, a fantastic leap for international business – who said you can’t make money out of culture.

Sarbjit Singh Chadha

Indian enka singer, Sarbjit Singh Chadha who was at the embassy reception told me, “Ashok, I used to follow the original Japanese cartoon when I lived in Japan. Believe me this will have wonderful lessons for Indian youth on the importance grit when facing life’s challenges. According to Colors, which will air the program, the series will present viewers an inspiring story of a young boy who dares to chase his cricketing dream.

Newly appointed Ambassador, Takeshi Yagi, was excited about this development in cultural exchange. Talking to Itochu’s honcho in Delhi, Mr. Ichiro Shimizu, I learnt that the original series featuring the Giants was popular in his days. He is in his 50’s. Alas, contemporary Japanese youth that has moved from TV to smartphones for entertainment does not get that some education he complained. Fortunately, a vast majority of Indian youth still access television. Moreover, since it is a remake, I hope that they have additionally adapted it for smartphone viewing.

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Actress Karishma Kapoor who was at the reception said she will make sure that her son who is a budding two and a half year old cricketer shall watch from 10 AM every Sunday. I, too, plan to be in front of the box on 23rd December when it debuts. Time will tell if I am able to sacrifice my golf every Sunday. 10 AM also clashes with my son’s karate class – perhaps its time to invest in a recording device.

アショク アシタ

I read recently in the Economic Times that Unilever finds innovations that have marked its growth in India, are now more relevant than ever, in recession hit parts of the world such as Europe.

As the Unilever CEO, Paul Polman, has rightly mentioned, “Learnings” from India such as lower price points for products in smaller packages or sachets, is gaining acceptance in the European market, poverty has returned as the local economies continue to reel under recession.”

It is transferability of such learnings that makes knowledge of international business practices so valuable. I remember my time in Toyota where we applied our learnings from implementation of kaizen principles for just-in-time (JIT) logistics across countries. Thus, Oman could benefit from learnings from Poland, and in turn teach a lesson (or two) to Australia and South Africa.

According to the newspaper, Paulman, also highlighted the success of the affordable water purifying product, Pureit.The product entirely developed in India, is now being sold by Unilever in at least 15 other countries, where according to him, it has become a popular brand. “

This reminded me of the concept of “reverse innovation” that was popularized by GE. Why is it called reverse? Previously, innovation occurred in developed markets, and products were sold across the globe. However, those markets are now saturated, or even in decline as Unilever is discovering. Undiscovered markets lie in populous emerging markets like, China, India and Indonesia. Thus, there is profit to be made by innovating for these markets. And, what sells here can also be sold in the fast-becoming-poor markets of the developed world. Learning frugal engineering has become so important that Carlos Ghosn of Nissan Renault invested USD 1 billion for starting a greenfield factory in India.

I suspect, eventually, as this becomes the mainstream model, the “reverse” will then be dropped from the nomenclature.

2012の第2四半期でのGDP上昇が5.5%と先週インド経済成長の低迷化のニュースが話題となりました。第1四半期の5.3%を上回ったのでよいと思うインド政府の主張もありますが、9%の上昇期待と比較すると、やはり対策が急務と思われます。

CPIインフレも10%前後で推移し、高いので、インド準備銀行(RBI)としては金利下げを避けたい。一方、対米ドルルピー安が進み、この一年で25%も価値が下がり、輸出業が刺激を受けるべきところ、欧州の経済問題など、グローバルスローダウンにより、効果がでていません。

この状況下、幾つかの対策を優先すべきと考えます。

まず一つ目として、FDI(海外直接投資)規制のさらなる緩和です。特に小売業 (Retail)をはじめ、保険業などへ投資規制緩和が考えられます。ルピー安がさらに進んでいるので、国際ビジネスでは、外資家企業はインドに投資し易い環境とはなっていますが、お金があるが投資できない状態です。これは資本増につながります。

二つ目は、インフラ整備です。7月末に6億人が影響受ける停電が、この課題の重要かつ印急性を語る。これは基盤づくりにつながります。

三つ目は土地取得に関する政策の透明化です。Tata のSingur 事件をはじめ、まだ、工業団地開発の際、土地は本当に所有できるかが不安となります。土地取得スキャンダルは日常ニュース事項となっているぐらいであり、工業化促進の妨げとなっています。

四つ目は、これだけの人口の馬力を活かすのでしたら、基本教育が重要課題です。経済発展の3要素のうち労働力が一つであり、人材資源豊富なインドでは、それ活かすために、それを磨くのが必要だと考えます。

アショク アシタ

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