Margins
Distribution is a margin business. International products entering India attract duty and the margins set over and above that escalate the prices, much above Indian consumer convenience. High priced European products have adversely affected the Indian consumer pattern, with many opting for short life low-cost products. “Manufacturers should look at making products for India at Indian affordable rates. It is only then we can successfully sell these products and in larger volumes.”
Branding & Advertising
Indian consumer pattern is unique but it also gets highly influenced through peer pressure and popularity which are largely driven by visibility of the product, branding and presence in strategic places. “Any kind of promotion of the product by the principal company will be a great help.”
A network of distributors no doubt reaches a larger geographically dispersed consumer base, but they require support to popularize the product. “For example, distributors can add value to products by customizing them or adding specialist services or support but unless this is conveyed to the end user widely, we cannot create popular demand.”
Indian Requirement
Sarvajit Singh, Proprietor of Indo Technologies, felt that “Quality does matter but at the same time, products cannot be sold at dollar rates in India. A product cannot be priced at dollar cost price converted into rupees plus custom price. The product becomes unviable. This is one of the reasons why Chinese products are opted over European brands in most cases.
International companies entering into India, should do so with a long term perspective. Appointing a distributor and expecting results within a year is one of the major drawbacks highlighted by distributors. “Anyone entering into India should move step by step and it takes a minimum of three years to expect any results. India is not only a price sensitive market but is also very choosy and particular. It takes time to convince the consumer.”
Extensive training is a must for success. “Floor cleaners are fairly simpler to understand and so are mops and other tools but with products like ride-on, etc., require hand holding and multiple training sessions.”
Presence of the international company directly or a subsidiary office, builds the consumer confidence on the product.
In conclusion, the distributor model itself has to be customized to suit the Indian consumer with reference to the kind of product being marketed. Today, with the Indian government’s single window clearance and financial support for startups, suppliers are looking at options of technology transfer or setting up of production unit on an international partnership. “This will take care of everything right from product confidence, spares, customization and above all price.”
