Amazon, Walmart and Apple. Since 2020, all three have set their sights on one of the fastest growing economies in the world: India. And that is not surprising, because despite the fact that the Indian economy is also being hit hard by the aftermath of Covid and the consequences of the Russian sanctions, India expects structural economic growth. In addition, the country is rapidly digitising, as a result of which the value of the Indian e-commerce market is estimated to be around 200 billion dollars by 2025.
Source: Worldbank
In short, this is a good time to enter the Indian market. To make your market entry a success, you need a good sales team. The country is almost as big as Europe, so without local support in sales and distribution, you will not be able to cover all regions in India. Knowledge of international sales is not enough. An example like Uber, which had to sell its Indian UberEats branch to its main Indian competitor Zomato, shows that you need to understand the Indian consumer well in order to succeed as a business. So how would you best organise your sales?
How do you start a sales team in India?
A traditional sales team in India normally consists of several managers: national, regional and local sales managers. At the top of the chain are the national sales managers who set the sales strategy, maintain relationships with key customers and coordinate the entire sales process. The regional sales manager coordinates and negotiates with distributors, after-sales and inventory. Because India is so large, sales managers often divide the country into 4 regions: North, West, South and East. The regional sales managers are responsible for one of these regions and appoint local managers within these regions, who have the responsibility 'on the ground'.
Look for a manager who can find Indian customers
If you are just entering the Indian market, you will not usually start with such a large team. It is therefore crucial that, in the start-up phase, you work at least with a local manager who not only has a lot of experience with your specific product segment, but also understands how to market that product in India. The fact that this manager has never worked as a national sales manager before does not even matter that much. It is more important that this person can find Indian customers, can set up the (online) sales, knows how the distribution in India works and dares to take responsibility himself instead of delegating tasks to others.
Selling in India without a national sales manager?
Once you have found the right sales person, do not immediately give them the title of national sales manager. Not even if he or she will eventually lead the sales team. In India, these titles are linked to a specific salary. For example, the national sales manager has an average income of over €50,000 per year. In addition, you create the expectation that he or she will be supported in his or her work by a team of regional and local managers, whereas you want to wait with that.
What are the alternatives? Give this first salesperson the title of business development manager. This position has exactly the same duties as a national sales manager in India, but without the hefty price tag and the expectation of the support of a structured sales organisation. This way, your first man or woman can gain experience to eventually reach the position of national sales manager and there will be money left over to quietly grow the sales team.
Another option is to choose a business incubator. This is a low-threshold and cost-efficient way of setting up a sales office in India without having to register your own entity. You can fully rely on the existing structures and people we have in India for the export to India and the internal sales processes, you are not legally responsible and do not have to incur any costs (compliance, audits, etc) that are normally associated with setting up an office. It is therefore the safest way to explore the Indian market and grow in a flexible way.