That Chinese tech companies have hit pay dirt in the humongous market of neighboring India is well known. So is the fact that Indian consumers have gone big on Chinese smartphones and appliances. But what is not so well known, perhaps, is the trend of Indian firms and professional talent making steady inroads into the China market.
The Indian subcontinent was a bit of a mystery for me until recently. Not anymore. In recent years, I have struck friendship with a number of Indians in China.
Why, a handful of my colleagues are from India, and I know five of them pretty well. I’m also friends with seven Indian students who are on an exchange program in China.
Among my acquaintances is a software engineer from India who works with a Chinese internet-based firm in Beijing, and two Indian businessmen, who set up a new office of their firm that specializes in cross-border online payment.
Hotel chain Oyo is a shining example of Indian firms’ successful expansion into China. Oyo, which Wikipedia describes as “the world’s third-largest and fastest-growing hospitality chain of leased and franchised hotels, homes and living spaces”, entered China in 2017. It has since gained substantial business in the market.
The firm now manages 180,000 rooms across 4,000 leased and franchised properties in China, which is 20 percent of the total rooms the company manages in India and South Asia.
“We take China as a local market,” said Ritesh Agarwal, founder and CEO of Oyo. “China is a sample for our operations in other foreign markets.”
According to him, the firm’s success in China has contributed to its momentum in the United States and Southeast Asia.
“China is also becoming more open to foreign companies,” said Ravi Shankar Bose, founder of mobile marketing firm Fugu Mobile, which chose China as its first overseas market.
To be sure, India’s software and pharmaceutical giants, and corporate icons, have had a presence in China through subsidiaries, local offices, and joint ventures. Last year saw spirited efforts of the Indian tea industry to popularize its strong and stimulating black tea products in China. Indian seafood exporters have been eyeing the China market as well.
To gain a firm foothold in China, Indian companies would do well to understand the local market inside out. In this regard, Chinese companies that succeeded in India and other countries may hold lessons in how to win in foreign markets.
If Agarwal’s deep understanding of the Chinese market is any sign, it’d be reasonable to say Indian companies may be well on their way in China.
In an interview with local media, Agarwal said Oyo has a strategy of “using the rural areas to encircle the cities”. Well, the phrase is a throwback to China’s period of wars when the general strategy was to first win the rural areas before moving on to conquer cities.
The Softbank-backed Oyo eyes its opportunities not only in top-tier cities such as Beijing and Shanghai but smaller cities that it believes pack in great consumption potential.
I was surprised to note Agarwal used this Chinese phrase at all. But then, I shouldn’t have been surprised because in this globalized, digitalized, economy-first world, what separates success from failure is whether or not an expanding business understands and exploits local factors.
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