China has been a great market for Kiwi businesses, but what about India? With 1.3 billion people and a growing middle class, there’s certainly potential.
To discuss these opportunities and how businesses can get a foot in the market, RadioLive Drive Time host Duncan Garner had a chat to Westpac’s SME Lead Damian Sharkey.
Listen to the audio of the interview, or read the transcript below.
A big opportunity knocking at the door
Duncan Garner: We’ve talked so much in recent years about doing business in China and so many of you and the businesses that you run or work for do business in China. We make a lot of money out of this, exports are fantastic.
But what about the emergence of India?
We’ve seen Indian politicians come to New Zealand recently and there’s talk of this free trade agreement, not over the line yet though. But how hard is it to do business in India and what are the opportunities?
Damian Sharkey is from Westpac and knows a bit about this. Damian, nice to see you in the studio.
Damian Sharkey: You too Duncan.
DG: It’s a big opportunity knocking at the door, isn’t it?
DS: It is actually, because the interesting thing to know about India is that not only is there 1.3 billion people there, but the middle class in particular is very large, it’s 35%.
I was talking to my friend Wenceslaus Anthony the other day who’s with the India New Zealand Business Council, and he says it’s going to get to 45% in the next 10 years.
DG: So they’ve got money.
DS: Yeah, it’s growing. When you talk to people about it, what they’ll tell you is that the lifestyle products are the things they are now demanding.
DG: What do they want?
DS: Wine and cheese and things like that. There was a story the other day of a guy who was selling gold kiwifruit in a store in Bangalore. He was selling when he started 2-3 trays a day. When I was reading this story he was up to 130 trays.
DG: Wow. Is this the Zespri stuff?
DS: That’s the one, yeah.
DG: I know the one. It looks quite impressive that.
DS: As the incomes grow they’re more concerned about eating the right food and these sorts of things. And that’s where obviously New Zealand has an advantage.
DG: Because we’ve made these gains in China, but it’s a different kettle of fish, isn’t it? It will be tough doing business in India.
DS: That’s interesting because when we talk to people like Wenceslaus Anthony, the most important thing is if you’re going there, you need to really explore the market. The best way to do that is to talk to New Zealand Trade and Enterprise. But when they say go there, the best thing you can do is actually spend about 6 months on the ground just talking to prospective customers.
DG: 6 months on the ground in India?
DS: When we talk to people, that’s what they say.
DG: It’s quite an investment in time and money isn’t it?
DS: It’s an investment in time, but I think the thing to remember here is that a city in India could be the same size as Australia in terms of market.
DG: Have we got a good reputation there? The way we do business, our goods, things like that?
DS: Absolutely. When you think about what Indians think about New Zealand, what they say is the quality, the technology, and our productivity.
DG: We have to find new markets, don’t we? China’s been great for us, and continues to and will just keep bulging I think. But we need to find new markets, don’t we?
DS: That’s right, and India’s interesting because the election of Prime Minister Modi two years ago, he’s really focused on cutting the red tape there and improving the productivity.
DG: When do you think our free trade deal will be done? Do you have any insight?
DS: No I don’t have any insight into that. I think I was reading we’re about 10 rounds in.
DG: So probably about 10 to go. Hey does Westpac do any business there? You got much of a foot hold there?
DS: Yes we do have a presence there, and certainly our focus in New Zealand is connecting people through New Zealand Trade and Enterprise and the India New Zealand Business Council. If you’re thinking about where to start, those are the places to go.