Selling International Products in India
Rising consumer demand, a skilled workforce, and excellent connectivity make India a key target market for foreign businesses. Moreover, industry-friendly laws, availability of low-cost labor, and developing infrastructure have made it much easier for such organizations to set up their operations in this country.
But, starting a business and sustainably selling international products in the Indian market are two different stories. There are several challenges that foreign firms can face and which they need to address to ensure profitability in this country.
Challenges of Selling International Products in the Indian Market
Here are some of the main challenges foreign businesses can face while selling international products in the Indian market:
- Intense Market Competition
India’s vast consumer market provides a goldmine of opportunities for several domestic and foreign businesses. Thus, several companies are in intense competition to grab a bigger share of the market. Under such circumstances, it can be really difficult for a new company to enter and expand its business.
- Price Sensitivity
Consumers in India hail from a wide variety of economic backgrounds. Each has its own spending capacity and will opt for goods that fall within its reach. So, if a foreign organization launches products in India keeping in mind the price range that is followed in their home country, the consumers will simply opt for other alternatives.
- Varying Consumer Demographics
India is also a country with varying consumer demographics. People belonging to different ages, sex, and educational categories have separate product preferences. Thus, launching a homogenous solution will not work when it comes to fulfilling their requirements.
For instance, companies selling men’s clothing need to understand that people belonging to the age groups 20 to 35 and 40 and above will not have the same preferences. There can be a stark difference in their style and fashion choices. Thus, developing a single product in order to cater to the needs of several age groups will not be effective.
- Intricate Legal and Taxation System
Another hurdle that foreign firms may face while selling products in India is the country’s complex legal and taxation system. There are several aspects that a company needs to adhere to like BIS registration, taxation formalities, state and central government approvals, etc., while starting their business.
Apart from this, understanding India’s direct and indirect taxation system for such organizations can be a cumbersome task. Furthermore, if a business plans to bring its goods from its home nation to India for sale, import duties, logistics expenses, etc., can significantly increase production costs.
Thus, to take care of such problems, experts always advise partnering with a management consulting firm.
How can Foreign Companies Increase their Sales in India?
To increase sales in the Indian market, foreign companies should consider customizing their offerings as per the consumers’ tastes. This will help bring their products in line with their needs and help businesses build a sustainable customer base.
For instance, companies planning to sell imported food products in India must understand the cuisine and taste preferences of the domestic market. By doing so, they can optimize their products accordingly thus solving the consumers’ necessities.
- Customising Offerings as per Preference of Indian Consumers
To increase sales in the Indian market, foreign companies should consider customizing their offerings as per the consumers’ tastes. This will help bring their products in line with their needs and help businesses build a sustainable customer base.
For instance, companies planning to sell imported food products in India must understand the cuisine and taste preferences of the domestic market. By doing so, they can optimize their products accordingly thus solving the consumers’ necessities.
- Manufacturing Locally
When selling international products in the Indian market, an excellent way to reduce production costs is to manufacture them locally. There is wide availability of inexpensive labor and the government‘s “Make in India” initiative serves as a great advantage in this regard.
This way, firms can also bring down their product prices to match the Indian consumer’s preferences and at the same time, maintain their revenue percentages. In the long run, this method will help them build a strong consumer base as well as expand their business in the market.
- Leveraging Digitisation
Due to widespread digitization in India, accessing a wide range of consumers has become a lot easier. Foreign companies can consider launching their products on e-commerce websites in order to gain exposure to a wider audience.
Moreover, they can consider initiating social media marketing campaigns directed at their target audience. Given the increasing preference of Indian consumers to shop for products online, implementing such strategies can be a great way for companies to improve their sales.
How can Management Consulting Firms help in this Regard?
For selling international products in the Indian market, knowledge of the local consumer’s preferences and developing a strategic marketing plan is essential. However, when it comes to implementing these measures, foreign firms might need additional manpower and resources.
A smart move can be to partner up with management consulting firms like Tecnova which employ professionals with in-depth knowledge of the local market. Such professionals use time-tested strategies to facilitate the successful conversion of the target audience for their clients, along with an increase in product sales.
Moreover, Tecnova also helps foreign businesses to enter into partnerships with Indian businesses. This helps foreign firms manufacture their products locally, which can help reduce the cost of production as well as increase revenue. Such collaborations can also provide businesses access to a pre-existing customer base and distribution networks. It can help scale their operations in the long run.
Reference
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Expansion And Growth Advisory – Tecnova
