Posts filed under ‘India’
The two Asian giants are focusing on Africa as never before, write columnists Anil K. Gupta and Haiyan Wang, leading to many misconceptions about the role Chinese and Indian companies are playing there.
More countries in Africa are joining the global economy. Over the last decade, the continent’s GDP expanded at an average annual rate of 5.1 percent, low compared with emerging giants like China and India but still well above the global growth rate of 2.9 percent. During this period, Africa also became far more globally integrated and saw its merchandise trade grow at an annual rate of 12.9 percent, vs. a global growth rate of 8.9 percent.
Representatives of the Export-Import Bank of the United States were in New Delhi Tuesday to promote the purchase of U.S. goods and services by Indian buyers.
The bank took part in the U.S.-India Strategic Dialogue headed by Secretary of State Hillary Rodham Clinton in the Indian capital Tuesday.
Fred Hochberg, chairman and president of the Ex-Im Bank, is also leading a business development mission this week in India.
Hochberg announced $25 million in Ex-Im Bank loans for two new solar-energy projects and is promoting the bank’s financing products to support other deals in India.
“India is a key country for U.S. exports and an increasingly important market for Ex-Im Bank,” he said. “In the first nine months of fiscal year 2011, the bank has approved $1.4 billion in transactions on behalf of American exporters and their Indian buyers. This financing has increased our overall exposure in India to $5.5 billion. With this kind of growth in demand, we anticipate that next year India may very well become Ex-Im Bank’s biggest single market.”
A big part of the growing partnership relates to developing renewable energy in India. In fiscal year 2011 through June 30, the bank said it has approved $75 million in solar transactions in India, with another roughly $500 million in upcoming Indian solar deals. Read more.
American Shipper, 7/19/2011
Starbucks Corp. unveiled an alliance with India’s flagship conglomerate—a move designed to pave the way for retail locations here and to sell more Indian coffee world-wide. India remains one of the big untapped markets for the Seattle-based coffee and food company. Chairman Howard Schultz said in an interview from Mumbai that India could one day rival China, where the company recently announced plans to more than triple the number of outlets to about 1,500 in five years. India is “as large an opportunity as there exists in the world, coupled with China,” he said.
The alliance is with India’s Tata Group, a wide-ranging company that owns everything from Jaguar cars to steel mills and tea plantations. Its Tata Coffee Ltd. unit owns the Eight O’Clock Coffee Co. in the U.S. and is a big coffee producer in India. The country, though known as a land of tea, is also a major coffee exporter—the fifth-largest in the world, according to the U.S. Department of Agriculture.
Mr. Schultz said one of the reasons for the alliance is to raise the profile and use of Indian premium Arabica beans in Starbucks stores elsewhere. The first phase of the alliance involves sourcing and roasting beans. Read More
SOURCE: P. BECKETT, V. AGARWAL And J. JARGON, Wall Street Journal, January 14, 2011
Western outfits looking to sell products should forget “glocalization” and embrace reverse innovation
After this month’s midterm election results, which showed voters single-mindedly concerned about jobs and the economy, President Obama quickly rebranded his trip to India and other Asian countries as a trade mission. The goal of the trip, he said, was to stimulate overseas demand for American goods and services.
It’s certainly true that, for many U.S. businesses, emerging nations present rich growth opportunities. In China, India, and elsewhere in the developing world, rising prosperity is expanding the market for consumer goods from high-tech razors to high-tech cars. But the traditional way of serving those markets suffers from flaws that eventually limit the growth potential.
Typically, multinational companies create stripped-down versions of products developed for Western consumers. They then offer these products in the developing world at a reduced price. To do this requires removing certain premium features or bells and whistles, and perhaps substituting lower-cost materials. Even so, the prices such products command are often unaffordable by all but a small percentage of people at the top of the local markets’ income pyramid.
In this model, innovation flows in only one direction: downhill, from the headquarters of the multinational corporation out into the world. The same basic products made for the developed world are modified for poor-world consumption, mainly through de-featuring and substitution.
This strategy is called “glocalization.” But while the word “local” is embedded in the name, in truth there is very little locally relevant insight reflected in the design of glocalized products. Thus, after an initial flurry of sales made largely on the cachet of the multinational’s global brand, the approach fizzles. As one Indian executive told us: “Emerging nations used to aspire to have rich-world products. Now they want rich-world quality in their own products.”
In the end, businesses that practice only glocalization will fail to exploit the full emerging-market opportunity—to the detriment of their bottom lines and the economy as a whole. Read More
Source: V. Govindarajan and L. McCreary, Bloomberg BusinessWeek, November 16, 2010
Although India has a long tradition of philanthropy, giving on a large scale has only recently become common among wealthy Indians and Indian corporations, the Washington Post reports.
Wealthy families in India have long supported the construction of wells and schools in their native villages. Today, however, with the encouragement of American mega-philanthropists like Bill Gates and Warren Buffett, affluent Indians are finding ways to do more for the poor, especially as donor governments such as the United States reduce their foreign aid to developing countries.
According to global consulting firm Bain, Indian billionaires give more to charity than China’s wealthiest businessmen but less than those in developed countries. Moreover, between 2009 and 2010, the number of Indian billionaires nearly doubled, to fifty-two, while half the twenty-five wealthiest Asian billionaires listed in a recent Forbes magazine survey were Indian.
After seven trips to India, Innosight’s Scott Anthony shares his observations about the country he considers the world’s next big innovation powerhouse.
While in India last week, I gave two talks—one in New Delhi and one in Mumbai—as part of a “Thought Leadership Series” sponsored by Transearch and Harvard Business Publishing. I also visited Village Laundry Service, a business we launched in 2008 to provide affordable, high quality services for India’s booming middle class.
The week started with a successful, and somewhat controversial, IPO from SKS Microfinance, one of the leading lights in the microfinance industry. (The controversy relates to whether the social mission of microfinance can co-exist with profit-seeking enterprises). And it ended with New Dehli’s newspapers fielding questions about whether the city would be ready to host the Commonwealth games in October.
It was my seventh trip to India in the last 13 months. I don’t consider myself an expert, and my trips have been limited to just a few big cities. Still, I thought it would be worth sharing some of my notes from the field. I jotted down six thoughts on the trip home.
MUMBAI—In the furthest reaches of India’s rural heartland, the cellphone is bringing something that television, radio and even newspapers couldn’t deliver: Instant access to music, information, entertainment, news and even worship.
Despite its rapid modernization, many of India’s 750,000 villages remain isolated except for the cellphone reception that now blankets almost the entire country after a decade of rapid expansion by operators. So in villages that don’t receive any FM radio stations, people have begun calling a number that has a recording of Bollywood tunes and listening to it on their headsets.
This primitive cellular “radio” service was used by close to 20 million Indians last year, phone company executives estimate.(By ERIC BELLMAN, The Wall Street Journal, NOVEMBER 22, 2009)
It’s rare that a $100 billion business can be marginalized, but such is the case with the international arm of Wal-Mart Stores (WMT). As a stand-alone company, it would rank among the top five global retailers. Inside the $401 billion retail giant, though, the business has traditionally received short shrift. Its Bentonville (Ark.) headquarters is underwhelming—a drab, largely windowless, one-story structure named after Bill Mitchell, a former Walmart executive whom nobody seems to remember. (By Matthew Boyle, Business Week)
India’s Tata Group has made innovation part of its DNA, setting up a way for handling new ideas and making creative thinking a performance criterion (J. Scanlon, BusinessWeek, August 19, 2009).
It’s not that there had been no innovation inside Tata Group, the 117-year-old Indian powerhouse responsible for that nation’s first steel mill, power plant, and airline, among other achievements. But when India’s long protected economy was opened in 1991, Chairman Ratan Tata decided that for his companies to survive and thrive in a global economy he had to make innovation a priority—and build it into the DNA of the Tata group so that every employee at every company might think and act like an innovator.
The U.S. India Political Action Committee (USINPAC) is conducting a high profile Power and Energy business delegation from US to India visiting Bangalore, India on May 20, 21, and 22nd 2009. USINPAC plans to engage with and visit business headquarters including Tata, BP, Solar, Bhoruka Power Corporation Limited, ABB Limited, Bangalore Electricity Supply Company, Kirloskar Electric Company, Reva Electric Car Company, Draper Fisher Juvertson, ORB Energy, Schneider Electric India etc.