Vision - September/October 2007 - (Page 27) nearly Six Million new cuStoMerS Per Month Sign uP for MoBile Service—the “faSteSt growing of any country in the world ” —lloyd Mathias “The name of the game is the distribution network,” says Sharma, pointing out that 70 percent of the Indian population lives in rural areas. “The easiest thing to do is serve the upper class urban market,” Sharma notes, then quickly adds, “But that’s only 10 percent of the people.” “If you’re shooting for market share, you have to get out of the city. You cannot be a major player without going outside the urban areas,” intellectual Property Safeguards he adds. And he suggests another value of such initiatives. Products, The technology boom affects all segments of the electronics busisuch as the phones with built-in flashlights, will have value in other ness. India’s government has developed a robust intellectual emerging regions. property law to assure innovation and development, according to “If it works here, it will be good in other markets,” Sharma the India Brand Equity Foundation. Amendments to the couninsists. try’s Copyright Act plus creation of a new Trademark Act, a new Nonetheless, the large rural opportunity—and even some of the Designs Act plus amendments to the Patents Act are intended to metropolitan ventures—raise unusual hurdles. For example, India reassure equipment suppliers, as well as content providers, about still suffers from third-world barriers that can affect electronics the safety of doing business in India. India is also a party to the distribution and operation. The electrical power grid—generally World Trade Association’s “Trade Related Aspects of Intellectual standardized at 220 volts and 50 cycles—can vary in different Properties (TRIPs) Agreement”. regions of the country. Even more difficult are the frequent power Nonetheless, Mitek’s Loyd Ivey encourages prospective suppliers outages and brownouts that affect on-going service. to “be very careful” when heading to India or any other develop“The range of fluctuation in the power supply is huge,” Sharma ment market. “Make sure your distributors sign an agreement to points out. Products must be able to survive the changes, which is protect your brand name,” Ivey says. He suggests that enterprisan “incredible nuisance to consumers,” he says, pointing to brownouts “we have had a PoSitive exPerience So far. that bring the power level too low to however, we Believe the governMent can measure. encourage greater it inveStMent By further The shifting retail environment reforMing the tariff regiMe.” –rajan anandan also affects marketing agendas. Beyond Motorola’s (and other mobile phone suppliers’) need to handle 75,000 independent deal- ing individuals have picked up names of start-up companies and ers, is the bigger issue of the retail framework. There are more than registered them in India for themselves, thus creating barriers for 15 million tiny mom-and-pop stores, most of them with less than firms seeking to bring their brands to the country. 500 square feet, according to a recent Economist report. The financial bonanza coming to India is likely to change that how Big can india get? landscape. Reliance Industries, the nation’s largest business Persistently, electronics makers and marketers cite the expandgroup, is spending 250 billion rupees (about $5.5 billion) to build ing middle class and unrelenting economic growth as reasons for up to 5,000 new stores during the next five years. Other global heading into India. McKinsey & Co. cited the same factors, then merchants—including experienced electronics retailers such as went a step further in its “Bird of Gold” report on India’s consumer France’s Carrefour, Australia’s Woolworths and Britain’s Tesco, as market earlier this year. well as Wal-Mart and Best Buy from the U.S.—are seeking a retail McKinsey predicted that by 2025, India could overtake Gerpresence. Under current Indian laws, these ventures will partner many—that traditional technology gourmand—as the world’s fifthwith domestic companies. biggest consumer economy. For example, The Tata Group, India’s second-largest conglomerLG’s Shin sums up his enthusiasm about India and its “unexate, is teaming up with Woolworths to launch the country’s first plored potential”, repeating the need “to have specific planning, nationwide consumer electronics store chain. Tata will put about re-sourcing and marketing strategies for each region” of the vast four billion rupees ($87 million) into the venture. It plans to open territory. 30 stores under the “Infiniti Retail” banner by late 2008, and up to Then, focusing on the global investment flowing into India, Shin 100 stores by 2010, according to a Financial Times report. (Wool- advises, “Prospects for any organization entering this market are worths runs the Dick Smith Electronics chain in Australia.) bright and promising.” • www.ce.org September/October 2007 In the consumer-goods sector, European, American and Asian brands are setting up franchise stores with Indian partners, who own and run the shops, while the global backers handle the wholesale and support part of the operations. Along with this shift in retail operations comes the need for back-office support. The U.S. Commercial Services sees “good prospects for design and retail consultancy services” as stores install point-of-sale technology, supply chain distribution, inventory and supply management controls and other systems. 27 http://www.ce.org
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