Our entrepreneurial fire will brighten Africa!
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“India Inc. can and will be highly competitive in Africa. Its success will end up giving European majors some pause and cause for concern...”For now, India is in a strong position in front-end or consumer oriented businesses, while China has its strengths in manufacturing and infrastructure development. And if there is any competition between the companies from these two nations it is back-end technologies like telecom infrastructure. I would in fact expect Indian consumer goods, telecom services, and media companies to find vast new markets in Africa. Global corporations can also use India operations as launching points for their investments into Africa. I believe Indians will soon be flying to Sub-Saharan Africa with the same zeal and entrepreneurial fire that European and Americans once had for China as well as India.
While China has till now adopted a largely heavy industries led investment approach in Africa, India’s approach is more entrepreneur and brand led. But then one doesn’t have a choice in these matters. Certain business ecologies already exist in certain regions of the world and it is from that position of strength that entrepreneurs are able to venture into new markets and seek new partnerships or business opportunities. India’s strengths are clear, and so are China’s. Given India’s cultural orientation, naturally, Indians should feel that their positioning is more advantageous to them, and perhaps the Chinese may also feel similarly.
Business is a competitive and cooperative endeavour, in which the Chinese are as much our potential partners as our competitors. Governance can get better in Africa, & private investors and corporations have a role to play in actually defining the rules of the road, in terms of transparency, regulation, and long-term thinking for the benefit of consumers and society as a whole.
China has been present in Africa much before than India Inc., but Chinese brands are not a threat. One has to only visit any part of Africa to recognise this. Indian businesses by and large underestimate their sophistication in being able to understand consumer needs and to develop strong consumer relations through distribution, communications and branding. India can and will be highly competitive in Africa. Its success will end up giving European majors some pause and cause for concern. For the short to medium term, I expect a period of contraction on the part of American corporations, who despite their global dominance have failed to build truly distributed and multi-nodal organisations. As American economic concerns begin to dominate their thinking, their ability to develop and expand global businesses will suffer. Bizarrely, companies with the weakest American leadership are actually doing better around the world than those with a strong centre, and these might prove the exception to the rule. As for European firms that have traditionally dominated several consumer sectors, they will face new competition from Indian firms. There are likely to be major buyouts, mergers or investments into Indian firms by European capital.
India has a tremendous advantage over China in respect of the way it responds to consumers’ needs for strong perceptions of value, trust, reliability, participation and relationship-building. This is what is commonly meant through the short-hand ‘brand’. Indian companies can nurture existing brands, and create new brands almost at will, and they will have legs in the marketplace. This sensibility is strikingly absent from Chinese firms of comparable size and market strength. That’s why India’s organised sector today finds that it is in a tremendously advantageous position in relation to Chinese goods in Africa and the edge will continue to become stronger.
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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