Soaring like a kite tied to the ground
May 14th, 2008 - by Nazia VasiIndia China trade seems to me to be soaring like a kite tied to the ground.
While both countries celebrate having achieved a trade target of US$40billion set for 2010 in 2008, there are still only 120 companies of Indian origin registered wth the Indian embassy in Beijing, and even fewer companies of Chinese origin registered with the Chinese embassy in New Delhi.
While businessmen in both countries express a desire to do business in the other, barriers - social, political and financial seem to be keeping them at bay. Of the difficulties that Chinese firms face while doing business in India, Reuters reported - Chinese firms have found profits in India hard to come by. Tax barriers are everywhere, eroding their cost advantages. Corruption is rampant, adding another layer of difficulty. And Chinese goods have a low-quality image that is very hard to shake.
The challenges are not unique to India. Most are exactly what western companies encountered when they first arrived in China some 20 years ago. But Chinese companies, whose success so far has been largely built on their home-court advantage and low costs, are much less prepared to tackle those issues.
Chinese companies, for example, lack technological know-how, marketing savvy and managers with international experience. Winning over Indian consumers is much harder than wooing the Americans or Europeans, who treat TVs and DVDs almost as disposable items.
Indians want to make sure that their hard-earned savings go to products that will last. Branding and marketing are key in India, but that just happens to be Chinese companies’ Achilles’ heel.
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