International Markeeting

GETTING CHINA AND INDIA RIGHT

CHINA AND INDIA-FOUR STORIES ROLLED INTO ONE
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THINK CHINA AND INDIA NOT CHINA OR INDIA
In this chapter, we talk about how important it is to work with the China and Indian market, which many people don't see because they get frustrated on choosing where to export, China or India. What people cannot see is that they can export to both places and make businessto both places and this is because of many factors.
China and India: Cousins, Not Twins: Similarities and differences
Vas Sizes and Populations
Here we can see that the population in each of these country is very high, China has 1.3 billion people while India has 1.1 billion people, making these places some of the countries with higher density of people.
I=C-12
This talks about how China isahead of India. China is 12 yeas ahead because its growth started earlier with an economic revolution and a global integration. India also started growing later, approximately 12 years later so we can see by looking at China how India will evolve.
India’s demographic dividend
What India has to its favor, is that the average population age is 24.3 years in India, and 32.6 years in China. This meansthat later, the production in India will become higher because of the old people in China and could eventually catch up.
Manufacturing sector
China’s GDP is made in a 47% because of manufacturing while India only 28%. This is because this revolution started in China around 1990’s and India just in 2005 so its advantage keeps ahead in a number of years.
Services sector
Here, India has anadvantage because it is much ahead in the software services sector and the information technology. This is because of english language and economies of scale that make them more attractive to other markets.
Infrastructure
China has invested around 8.2% of its GDP on infrastructure and India only 4, so this puts China way ahead in any other kind of business because they have the right infrastructureto process and deliver products and services.
Foreign direct investment
China has attracted over 10 times the foreign direct investment India has had in the past 10 years. This because of the tax breaks by China’s government and its modern infrastructure.
Growing economic integration between China and India
As we have seen there are some major coincidences between both markets. The historytells us that around 1949 both countries got isolated and stopped their bilateral trade. But as for now, things had started changing and the integration between these two economies is taking place.
Their bilateral trade has come back since 2000 and the results had been really incredible.
In 2000 they made $2.9 billions in trade, and since then for the next years they’ve grown rapidly reaching $36.0billions in 2007.
Strategic Implication 1: Leverage the scale of both China and India
This strategy talks about the importance of targeting this market. We must do so because the markets in these places are growing enormously. For example the PC industry that is slowing down in places like United States, but keeps growing at over 20% annually. This means that China will be the biggest PC marketin a few years, and then India will be following this tendency.
This strategy is important because of economies of scale and also because of the costs involved in producing something or giving a service.
It makes China and India a big emerging market because they have low costs that let them compete worldwide and also the same people in this countries is targeted with many of this products atlow costs so that their high population can reach the new products.
Strategic Implication 2: Leverage the complementary strenghts of China and India
Companies must notice the advantages of both countries to get the most benefits of it.
This is why we can see that the main factors and strenghts of China are their infrastructure and their manufacture. In the other hand India’s strenght is their...