Companies

Indian companies need to develop a China strategy: Nirmalya Kumar

Vinay Kamath Chennai | Updated on January 24, 2018

Nirmalya Kumar, Member, Group Executive Council, Tata Sons   -  Bijoy Ghosh





Last year, Nirmalya Kumar, Professor of Strategy and Marketing at London Business School, made the transition, in a rare instance, from being a full-time academic to join Tata group Chairman Cyrus Mistry’s high-powered group executive council. As a consultant and author, Kumar, who spent 30 years abroad teaching at Harvard, INSEAD and later at LBS, has worked with more than 50 Fortune 500 companies in 60 different countries. Kumar was in Chennai recently to deliver the third Raghu Pillai Memorial oration organised by the Madras Management Association and Coaching Foundation of India. In this interview, Kumar talks about Indian brands going global and how Indian companies need to develop a China strategy. Excerpts:



With a slowing down of the Chinese growth engine, is this the best time for Indian companies to get some of global manufacturing to move here?

There are big opportunities for Indian companies.

But, China growing at seven per cent today is larger than China growing at 10 per cent five years ago. We need to have a China strategy; Indian companies have been relatively weak here.

Even if China grows at 6 per cent it will still become the largest market in the world. We need to develop a China strategy based on sourcing, partnering as well as on its market. If you see our successful companies, like JLR, China is a big contributor and central to the strategy. Our job at the group centre is to evangelise the opportunities but it’s for the CEOs (of the Tata group) to determine what makes sense for their companies.

Another weakness, if it were, for Indian companies is that we don’t look at our neighbours. If you see large companies in developed countries, the neighbouring markets are critical.

For Indian companies, logically, Pakistan and Bangladesh which are both large and growing fast, should be important markets. Bangladesh is booming; there are a lot of opportunities and the cost of business with neighbours should be low. However, Indian companies are still over-emphasising the US and Europe.

We don’t target Brazil as well; most don’t know that Brazil has states which have a higher GDP than India.

Going global needs a new mindset and that’s a big challenge. In large countries, our own markets are too attractive.

Is the global scenario conducive now for Indian brands to go abroad?

Small brands can perhaps make it abroad, such as Fab India, Forest Essentials.

These are brands which have imbibed something of India in them, but adapted to a global audience which see them as relevant.

To go global, companies need global customer insights, you need a HR function which thinks global. Bollywood movies, for example, do very well, but have no global audience, except for the Diaspora, but Indian authors seem to have cracked that code of being attractive to a worldwide audience. Many of the big companies don’t see the need for global insights since the opportunities are so much here.

What is the central debate around marketing now?

The debate is how do you move to the customer of tomorrow, who is going to be more mobile, more social and more connected.

Today, many marketers realise they need to be more active on social media and on the mobile; but they are still adopting a broadcast mode.

Earlier, they designed an ad which people would watch in a passive state. Now, we have to design an ad which people will be motivated to share; it’s a subtle but powerful change.

On a medium like FB you have to look at how to enhance the social experience of customers. For example, if you are booking a show through Ticketmaster, can your friends see which tickets you are booking and book seats alongside; that makes the brand experience more social.

One piece of infrastructure we should invest dramatically in is to get everyone on to the internet at high speed; building roads and airports is a challenge but this is all about building base stations and putting up bandwith so that people are connected to a hot spot everywhere. We need a big bang in that area to leapfrog to the next level.

You are also a big collector of art. Are you continuing with your passion after returning to India?

(Laughs) Since I joined here I don’t find the time. Earlier, I used to visit a lot of museums and shows but now I don’t have the time to go to auctions. I’ve got a large collection of over 70 Jamini Roy paintings in my London home where I visit once a month now and a collection of 40 Tagores in my Kolkata home.

I learnt by seeing a lot of art which improves your visual vocabulary and makes you see the connections between themes.

Published on January 12, 2015

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