This article emanates from a workshop which I led in Tokyo earlier this year for senior executives of Japanese companies from across the spectrum in terms of businesses and size. As I interacted with participants and also spent time with them over lunch and dinner, a few pointers kept coming back constantly. Not to mention the deep, long conversations with my American friend who has made Tokyo his home for the past two or more decades, about Japanese culture and way of life. While not exactly an insider's view, the tips shared here serve a significant purpose of bringing forth certain areas which, if focused upon, can do Japanese brands much good.
Business ties between both India and Japan are very strong and have only been growing in the past few years. In investments, Japanese government and companies are among the largest. Their preference and comfort levels with the Indian market and systems are also much higher relative to the same with other growing markets globally. Japanese companies have also been here longer and that makes the question even starker on why they have not been as successful as certain Western or Korean brands have had in India despite all these positive factors. I am focusing on six key areas or pointers and elaborating on them in this article:
Bet/invest big early
There are excellent case studies available in public searches on Google that chronicle how in the consumer electronics market Korean companies edged out their Japanese counterparts. One striking characteristic has been the willingness and openness of Korean brands (Hyundai, LG & Samsung) to bet or risk early. While venerable brands such as Sony hesitated, these companies went about investing in local plants, larger and wider service network and huge marketing spends. The risk was higher, definitely, and so were the returns.
The need to bet or invest big early is not without reason. India is among the last of the major markets which are nascent or offer high growth potential. It has much consumer diversity. All this has led to a surfeit of brands rushing into the market and investing leading to intense competition and clutter. And last but not least, Indian consumers thrive on value for money irrespective of their purchasing power. So, it is not peaceful waters for smooth sailing but stormy waters which need bold leadership or decisions. The stakes and returns for the winner who rides those stormy waters well are phenomenally high and hence the risk-taking appetite needs to be bigger as well.
It is not only applicable to Japanese brands but to most overseas brands trying to make a mark in the vast and complex market that India is and its consumers are. What works elsewhere in the world does not guarantee its success in India and at the same time, this is not fully true across product categories also. And when one talks of customisation it need not be completely new products built for this market, but fine-tuning existing products or even business models or marketing strategy. It is ironic that the success that Suzuki had with Maruti in India was not quickly picked up and widely replicated by its Japanese counterparts. Nokia in mobile phones or Samsung in televisions and Hyundai in cars were willing to go the extra mile and look at where it took them.
Local leadership or effective immersion
It is all fine to bring in expats at the start phase but completely another to stick to them as the core of the India leadership over the long term. The ones successful in the Indian market were all able to quickly localise their leadership though the top management could still have an expat or two. This also sends a positive signal to the Indian executives that they can aspire to lead rather than convey that there is a ceiling at the top. The recent controversy where many senior executives left LG illustrates this well. The benefit of localised leadership with a sprinkling of expats ensures there is enough understanding of the market’s complexities and navigating the arduous canals that Indian consumer behaviour is.
Excellent product or technology is simply not enough.
Ask me and I will vouch for Sony as a brand that delivers excellence and being among the best products on offer in many categories. The same is true of multiple other brands having been there and experienced some of it. But Indian consumers are not simply driven by deciding based on that alone. Premium is not something that one easily parts with. This I witnessed when I went to buy the second flat TV for our home. The hour I spent there, comparing the products on offer and observing other customers go about making their decisions simply convinced me of the above statement. We all love excellence if it comes at just a marginal notch above the next one and not a huge leap. On a related note, many Japanese brands tend to price themselves out of the market or push them into a niche market. Of course, this is changing. Even the venerable Toyota with its Indian joint venture partner has had a bruise or two in this area in the Indian market.
Don’t make the mistake of thinking an Indian consumer is OK with a bad product sold cheap either.
Aggressiveness in marketing
Go for the jugular once you get your house set, your targets clear and your priorities right. It is such a large market with such vast potential that if you reach for the stars, at least you won’t end up biting the dust. I mean calibrated and measured aggression, which is relentless and sustained. Indian consumers love being wooed (particularly with offers), they attach some value to a brand they see and hear a lot (of course in the right contexts that add to the brand’s credibility). So, why not? If you get your numbers right, relatively lower margins are not an issue at all.
Don't jump to quick conclusions – this is not indicative of my professional leanings. And it is linked to the fifth point above. We are among the loudest people you can find on Planet Earth. And we love flaunting (though some would say it is a new love developed due to recent highs of consumerism). Be visible as a brand. Talk about your plans, your commitment to the Indian market, your strengths and your great products. We don't mind it at all.
Let me say a little about my short trip to Tokyo. I loved the food, the people and the punctuality about everything. And about the workshop, it is the first time anywhere in the world where the executives stood in a line to ask a question and very respectfully exchange cards.
(Xavier Prabhu is Founder-CEO of PR Hub, an independent consulting and PR boutique firm.)