Differences in the way of doing business among Indian states

India is almost as large as the European Union and has more than twice as many inhabitants. No wonder, then, that there are major differences between the various Indian states in terms of language, demographics, politics and economic growth. For a successful start-up in India, it is therefore important to take these differences into account when drawing up a business plan. Because what works in Gujarat does not automatically work in West Bengal.

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The regional differences among Indian states

For a European company to succeed in India, you must be aware of the country's vast regional differences. India is a fragmented market with large, and often underestimated, regional differences in language, culture, infrastructure and wealth, all of which affect the regional business culture.

Indian states are therefore better compared to individual countries than to, say, the Dutch provinces. Indeed, India's most populous state, Uttar Pradesh, has as many inhabitants as Brazil, and the southern state of Tamil Nadu has an economy as large as that of Hungary. 

There are also large demographic differences between Indian states. For example, southern India is older, has more to spend and is more educated than the rest of the country. Northern India, on the other hand, is younger and relatively poor.

North Indians primarily speak Hindi, while South Indians prefer to communicate in English or in their regional state language, such as Kannada or Malayalam. The German wholesaler METRO, better known in the Netherlands as Makro, found out after their start in India that there are big differences between the groceries that customers in a certain region put in their shopping cart and adjusted the assortment accordingly by adding more local products. Logical really, Finns also have different preferences than Spaniards.

"METRO found out that there are big differences between the groceries that customers in different regions in India put in their shopping cart."

- Mark Alexander Friedrich, Head of International Affairs for METRO

Do not make one business plan for all of India

For a successful start in India, thorough market research is a must. Regional differences are not only obstacles, but can also work in your favor depending on your sector and product.

The southwestern states, such as Maharashtra and Karnataka, are a suitable base for technical sectors such as automotive, engineering, as well as outsourcing IT and Research & Development teams.

Northern states such as Punjab and Haryana, among others, have thriving agricultural sectors, creating opportunities for food processing and renewable energy industries.

Starting in the right regions is also essential for selling your product in India. European products almost always fall in the highest market segment in India, so it is smart to start in the regions where people have sufficient income and there is real demand for a more exclusive, expensive product.

"Approaching India as one country by working with only one distributor or partner is one of the most common mistakes European companies make in India," says Klaus Maier, CEO of Maier + Vidorno, IndiaConnected's partner in India.

"In Europe, you wouldn't ask an Italian distributor to set up your network in Norway either. An Indian partner or distributor operating in a specific state has a good network only there and will not succeed in successfully expanding sales to other states. Therefore, those who take India seriously start with about four dedicated, local managers or distributors who understand your product and the regional market well. With them, the market can be mapped and the logistics network set up, one of the biggest challenges for international companies in India. In this way, the Indian market can be conquered step by step, successfully." 

Selling successfully in India with the right strategy

For anyone looking to conquer the Indian market, IndiaConnected has put together a special guide in which we offer you insight into the steps to take to successfully start and grow your sales in India.

From preparing your first export shipment to India to setting up a solid after sales service, we guide and advise throughout your India journey.

The 4 most important sales trends in India right now

With the pandemic and the global economic slowdown that followed, sales organizations around the world must constantly adapt their strategies to a changed clientele and climate. Enterprise software developer Salesforce, in its The State of Sales. surveyed over 300 Indian sales professionals about the changes and trends facing sales teams in India.

Here are the 4 most important sales trends in India right now:

Sales trend 1: Data and other customer insights play an important role in the sales process in India

In India, it is always essential as a salesperson to demonstrate a deep understanding of the customer's unique needs and desires, but this is even more important in economic, uncertain times when the hand may be tightened. Salespeople in India must therefore also be excellent consultants and not only have an outstanding knowledge of their product, but also be able to quickly discover the customer's needs.

Therefore, to better understand and advise customers, most Indian salespeople gather information from a variety of sources, both public and proprietary, such as from the CRM or sales system being used, prior to customer contact. In addition, it pays to be alert to the competition. By monitoring the activities of the competition on a daily basis, it is easier to respond to offers from other parties. For example, by adjusting the price or offering extra service.

Sales trend 2: Indian consumers want to be able to find your company on all channels

Indian buyers expect sales organizations to be present on all channels where they themselves can be found, from email to social media. 57 percent of buyers prefer to approach companies through digital channels, according to the survey.

In high-performing sales organizations, customer contact is more often through an average of ten channels. In particular, online portals offer a variety of self-service options. This allows salespeople to spend more time on strategic accounts, customer acquisition and keeping current customers happy.

Many Indian sales teams are also automating repetitive tasks, such as by deploying artificial intelligence (AI), in order to have the time to serve customers across all different channels. 68 percent of salespeople surveyed who work with AI said that deploying artificial intelligence has significantly improved workflow.

Sales trend 3: All departments must work together smoothly - after all, the Indian customer expects a frictionless buying experience

Indian buyers cite their customer experience as the deciding factor - of which sales is only one part - when they do business. They are looking for convenience and consistency in their interactions with companies. But when departments such as sales, marketing and service do not work smoothly together, customers can face conflicting communications and long wait times.

It is therefore important to break down possible barriers between the different departments and ensure that everyone has insight into what steps have already been taken with the customer. By creating an open structure and having all departments work together as well as possible, the most pleasant customer experience can be created.

Sales trend 4: The role of sales operations in Indian sales organizations becomes more important

In 2020, 54 percent of Indian sales managers said sales operations is important in determining sales strategy. By now, the figure is 65 percent.

Sales operations has traditionally been seen as the department that works behind the scenes, but that is changing. The tools and sales processes that sales operations has always been concerned with should now provide greater efficiency and cost savings.

So companies that want to prioritize it should involve sales operations in setting strategy. More than eight out of 10 Indian salespeople say sales operations is a crucial contributor to the company's growth.

Is your sales team in India performing as expected?

Every sales organization worldwide is currently facing uncertainties and major changes due to the various international crises affecting everyone. Therefore, it is important to be as flexible and agile as possible in order to respond to the latest trends in order to keep getting good results.

Are you running into problems in this area in India? For example, are sales disappointing or is the service operation in India not going according to plan? IndiaConnected helps companies improve their operations in India. We understand complex and difficult situations in the Indian business context and know how to solve them. Whether it is finance, tax, compliance issues, HR or operational matters, we help you find the right solution and implement it.

Learn more about how our experienced, local expert can also improve the organizational efficiency of your Indian subsidiary.

Two smart ways to set up after sales service in India

Good after-sales service is critical for Indian companies to purchase expensive and high-quality machinery. But both exporters and companies manufacturing in India often see providing this after-sales service as a major challenge. It is not at all necessary. Here are two ways in which you can smartly set up your service organization in India.

Annual Maintenance Contract

How best to organize your service depends on the type of product you sell in India. For example, if you export simple products that require little maintenance, telephone support and the possible supply of spare parts will suffice. If, on the other hand, you offer complex products or customer-specific solutions, you will face a greater challenge in India. 

This is because often these types of products require regular maintenance or repairs on site, and that can be difficult in a country as large as India. In India, it is common for companies to enter into what are called Annual Maintenance Contracts (AMC) with you as a supplier for this purpose. An AMC is an annual maintenance contract with your customer for the repair and maintenance of the products you supply and can run for about 1 to 3 years. It is almost impossible to set up such a comprehensive service in India from abroad. Apart from the high cost, the quality of service is usually substandard due to the longer response times. There are two ways you can organize this in a thorough way in India. 

1. Outsource to a local dealer

You can choose to outsource your service in India to a local partner. The advantage of a local partner is that they are already established in the Indian market and have a network of distributors, mechanics and customer service representatives from which you can benefit directly. But if you offer a complex custom product or solution, chances are the Indian dealers do not have the technical and product-specific know-how to provide good service to your customers. Moreover, you need to figure out in advance how to protect sensitive information about your product and how to contractually manage the partnership to ensure that the services provided meet your company's quality standards. In addition, you must properly manage the storage and delivery of your spare parts. Sending the spare parts from abroad when they are needed is an inadvisable strategy. This will cause an awful lot of delays in the good service you want to provide. 

2. Setting up your own service organization in India

If you provide a high-quality product, it is highly recommended to have a permanent presence in India. Only in this way can you guarantee a thorough and comprehensive service. Indeed, having your own sales and service office in India enables you to provide service that is carried out according to your quality requirements by your own personnel. Due to the size of the country and the differences between Indian states, it is often unavoidable to have to work with one or more outside dealers for nationwide coverage. Then again, having your own service office in India takes a lot of work off the head office's hands if collaborations with outside dealers are initiated. This is because they can maintain day-to-day contact and check that the work is being done correctly.

Even for the distribution and storage of your products, having your own staff ensures that this is done with the right knowledge and in the right way. Of course there are costs involved, but if you use the storage and distribution for your regular sales and installation as well as for service afterwards, it is often well worth the investment. You can also more easily offer your Indian customers from your own entity an AMC that meets their needs. Indian customers are notorious for their high service expectations. If you are able to provide good service after purchase, then you will have an excellent starting position in India.