Tom Chalmers - Is India finally the place for new business?

Since starting in business I have long been a little wary of China and India as new markets. They have always appeared the focus of so much effort by so many companies with little progress apparent. In fact, the distraction of entering both markets has seen the downfall of many businesses...

The appeal is clear – both countries contain billions of people and probably no two growth markets have been discussed so regularly in the business press as places of opportunity. As the saying goes, only a small fraction of those billions of people means many millions of pounds of business…

I have written about China separately, where I think there is great opportunity as well as the necessity for clear thinking and caution. As for India, where I am this week rushing between Delhi and Mumbai and back, the instinct for caution has been dimmed by what feels like a bit of a turning point.

This feeling is based on several key recent milestones:

  • India has recently replaced China as the world’s fastest growing economy, growing approximately 7% year-on-year

  • Mobile phone usage has risen rapidly and mobiles are now a central device to hundreds of millions of people in the country

  • The two many sectors of current opportunity are:

    • Technology: see mobile phone usage above and also the huge growth in ecommerce initially led by three companies but now two, Flipkart and Amazon, with Snapdeal appearing the first casualty of the fierce market battle.

    • Banking: we many millions of Indians, mainly in rural areas, not using a bank but likely to be using a mobile phone, there has been a huge growth in online payment solutions, such as PayPal and Google Wallet.

  • With a literacy rates of approx. 72% in a population of 1.2bn and with over 850m people speaking one of nine key languages in India, of which English is just one, the potential customer base in India is obvious.

The above makes clear why India is suddenly a market many businesses around the world are making central to their strategy and with very sound reasoning. The Government’s ‘Made in India’ campaign also offers many opportunities for creating business within the country.

Having said that, it isn’t without issue – regulations, decentralisation of power and decision-making and still being a developing country with the scene of vast poverty apparent immediately to any visitor. Doing business in India still throws many challenges in front of any aspiring business.

However, there does feel like there may be corner turned – a vast, increasingly connected, multi-lingual population in a rapidly growing population. India may now finally be the place for all businesses to look very seriously at… watch this space.