The pursuit of global expansion by Indian startups: Learnings for the 2020s
Blog: NASSCOM Official Blog
- Setting the ‘right’ strategy and sequence of priorities
- The objectives of the expansion (strategic/financial) and how progress will be monitored
- Developing the skills (in-house or through external advisory) to plan and execute entry into a new market
- Acknowledging the differences in the target geography in terms of culture, product and regulation
- Identifying a strong team which will ‘own’ the success of the international expansion
- India itself is a megadiverse country. The presence of multiple income segments across different tiers of cities each characterized by state and city-specific nuances is a litmus test faced by any ‘big-enough’ startup. This is because what works in Mumbai will need tweaks for Jaipur and you may actually have to do significant changes to sell in Coimbatore.
- Our pool of graduating engineering talent (15L+) is one of the largest in the world. Though we can surely do with improving the quality of a large number, the access to fresh talent armed with the latest technical skills in areas such as AI, ML provides a competitive advantage to India-born enterprises.
- We are the world’s second-largest English-speaking country and we consume offerings in English. A product built for India is easily scalable in most parts of the world.
- We have a history of entrepreneurship and establishing businesses globally. India Inc has already traversed the path before.
- The Indian diaspora is everywhere. At 17.5 million or 6.4% of the global migrant population, the diaspora beachhead is large enough for Indian startups to pilot launch in a foreign market, make mistakes, iterate the product before a full-launch to the mainstream population. This is especially relevant in developed markets where the cost of advertising and distribution tends to be very high.
- Build the ‘right’ team with a mix of local and HQ country teams. While the local knows new-country market stakeholders, the ex-pat from HQ-country effectively supplements this with corporate knowledge and direction.
- Don’t do everything (customer segments or product categories) at once and gradually scale-up operations from an initial pilot to soft launch to making the full-fledged offering available in the market
- Leverage ‘diasporic synergies’ and use them as a beachhead. By focusing resources on ‘home country customers’ abroad and winning that market first, successful enterprises establish confidence through a demonstration effect before attacking the full new-market population.
- Acknowledge that positive external factors of a new country only set the stage for an international opportunity but it becomes more important than ever to have the right internal pieces in place before going global
- Select adjacent markets to India in terms of ‘psychic distance’. It’s more feasible to develop a company’s internationalization capabilities in locations where the challenge of “foreignness” is less acute before foraying into completely new territory. A leading Indian home improvement player and a digital-first chain of premium fitness centers have successfully established in Singapore and Dubai respectively as their first international markets.
- Build ‘mental latitude to tweak and adapt’ and do ‘everything it takes’ to succeed in the foreign market. The difference in customer behavior and tastes may demand modification of everything from after-sales support and to offering locally customized guarantees.
- Partner with key local companies to forge win-win relationships (learning alliances/co-branding relationships) wherever possible in the value chain. Not only does it enable a new firm to not commit obvious mistakes, but it also focuses on resources and efforts where it is most essential instead of reinventing the wheel.
- Establish a seamless double-loop learning process between the HQ and new country local operations. Going international is a significant ‘coming-of-age’ moment for any fast-growing startup and the best companies establish war-rooms to seamlessly share knowledge and modify strategies in real-time in response to the evolving ground situation.
- Startups, especially those in Consumer Tech, tend to be disruptive in markets or segments where they enter. Once the proposition is validated, ‘localized enough’ and business stabilizes, efforts need to be made on a war footing to keep local copycats at bay. You don’t want to lose in a guerrilla attack by a local competitor who replicates your business model and has government backing. The world’s leading ride-hailing startup was forced to exit China precisely because of this reason.
- And finally, it is important to not be distracted by non-strategic factors. The company’s strategy and problem-solving should be based on what works for the business in the near and long-term, rather than a gamut of quick fixes. It’s more feasible to build pillars in the early days when reputational risk is low.
The post The pursuit of global expansion by Indian startups: Learnings for the 2020s appeared first on NASSCOM Community |The Official Community of Indian IT Industry.
Leave a Comment
You must be logged in to post a comment.