Mumbai – The Market

Shortly after arriving in Mumbai, I decided to write my final market insights project on the growing smartphone industry and the lens through which I have viewed company visits has been centered on the smartphones application to that particular field.

The day after arriving in Mumbai we visited Yash Raj Studio, a prominent Bollywood studio. Our host Jonathan, an independent musician with Yash Raj, overheard a few class members discussing our trip on our plane ride from Delhi and offered to let us tour. The tour truly was a once in a lifetime experience, and I still feel so lucky that we had that opportunity. My previous experience with Bollywood was limited to the music provided by Professor Cheema and the music videos that I’ve watched while in India. The incredible colors, catchy beats, and semi-dramatic stories that infuse the Bollywood stories caught my attention and it was interesting to hear Shantanu Hudlikar, who has worked in the field for many years talk about the arts in India. As I mentioned earlier, I was particularly impressed by Shantanu’s commitment to producing songs both through Bollywood and independent musicians that would be accessible to all socioeconomic groups and inspire greatness in Indians. For so much of the trip, business has seemed so disconnected from the masses. Yes, improved industry provides increased opportunity and hopefully jobs and investment in infrastructure, but this direct spiritual connection between a thriving industry and the Indian people – regardless of economic background moved me. As far as mobile phones and smartphones are concerned, these devices are the primary way in which many consumers enjoy the songs that Yash Raj and other studios that support independent artists produce. In my research, I looked at the practice application of smartphones and ignored the way in which they enhance cultural experiences and consumer happiness.

On Thursday, we visited DDB Mudra and Proctor & Gamble. Our visit with DDB Mudra was interesting on a lot of levels. First, it was exciting to be exposed to a marketing agency that works with such a diverse group of products – from Pepsico to multiple Indian national banks. DDB Mudra’s presenters explained the Indian marketing industry and some great challenges and opportunities facing Indian companies. Part of DDB Mudra customer segment is Indian entrepreneurs and as we discussed the opportunity within the smartphone market, I wondered if their immediate acceptance of this device as the way of the future was based at least partially in the innovative mindset of many of their clients. With one of the largest growing middle class markets in the world, according to our hosts at DDB Mudra, India is be prepared to take on the world of smartphones and eager to do so. While they mentioned that these devices are more prevalent in metro areas and tier 2 cities, when the rural area catches up, India presents an over 1.3 billion person market, a risk well worth the increased investment necessary to make it profitable. As smartphones continue to get cheaper, they present a medium that advertisers like DDB Mudra must master if it wants to stay competitive in the Indian market. Additionally, DDB Mudra was the first company that connected owning a smartphone to a users identity as an Indian. Reimagining India has talked about the practical implications associated with modeling a nationwide identity system based on the smartphone platform. Using a phone and applications to receive government subsidies, to engage in ecommerce activities or to validate educational experiences would help track the 1.2 billion people that sometimes overwhelm India.

Later in the afternoon, we visited Proctor and Gamble. Again, smartphones entered the conversation. When I began this trip, I assumed the Indian market would remain focused on the feature phone, as most of the phones in circulation now are not smartphones. However, as technology and infrastructure increase and more companies enter the Indian market, a diverse offering of smartphones will become available. Incredibly wealthy consumers can afford flagship devices like the iPhone 5s and those without means for such a luxury device can purchase a more economical smartphone model from one of Apple’s competitors. Proctor and Gamble was more technology adverse than I expected. While our host described how P&G was working to utilize the features of SMS phones in advertising, he did not seem to have much faith in either digital media advertising or smartphone aps. While it is clear that the market share is not present at the moment, for a company that is thriving in India, I expected more of a commitment to innovation. However, the determination to use tried and true practices in India is evident in its introduction of new products as well. P&G does not manufacture a new product in India until it is sure that there is a demand for it. This reality explained the 2% of products that were made outside of India and shipped in. While these products are eventually also made in the Indian market if they prove successful, P&G’s focus is on being cost-effective and maintaining its comparative advantage. Just as it doesn’t invest in the infrastructure needed to manufacture new products until they are proven, I don’t think P&G will invest widely in digital media marketing in India, specifically in smartphone and phone-internet applications until they are proven as a profitable venue for consumer interaction.

In my two weeks here I have had the opportunity to see India as both a marketplace and the home to an amazing culture of tolerance, vibrant people, incredibly architecture and meaningful heritage. India is full of opportunity and the potential for sustained growth is enormous. However, India sits in a precarious spot. It is not yet a modern, developed nation as roughly a third of its population lives on less that $1.25 US a day. However, with the investment of large multi-national corporations and the economic power of Indian businessmen, India is also not a third world nation. The two India’s metaphor from earlier should be expanded beyond simply the people that inhabit it to include the country as a whole. With an election in a few short months and constantly changing policies, this year could be an important one for India. Modi, the likely successor for Prime Minister, is a pro business candidate who could continue to improve relations with the business community. However, his past, marred by a large killing of Muslims in 2002 in his state, leaves many to question whether he will continue India’s commitment to tolerance and improving human rights for minority groups. As India continues to come of age in this modern world, it must struggle to balance the quality of life for its people with the necessary mass investment in infrastructure, business and technology that will allow it to leap forward onto center stage.

 

Mumbai – The City

Immediately after stepping onto the streets of Mumbai, it was clear that we had entered India’s cultural capital. Before leaving last week, I read in a blog post from last year that Mumbai was the New York City to Delhi’s Washington D.C. and after a few days here, I completely agree. What is also clear is that the separation between past and future I felt in New Delhi is also present in Mumbai and it seems to pervade the entire country. While Mumbai seems to have less traffic, feels a little safer, and a lot more Western, even having cafes like Café Leopold that serve as an oasis for Westerners in the middle of one of Mumbai’s markets, it’s still very clear that the country we are visiting is a world of its own. At our visit to DDB Mudra, an advertising firm in India, our hosts discussed the challenges of advertising to “two Indias” and I think this separation within the population explains a lot of the cultural phenomenon that I’ve been experiencing.

One sector of the Indian population is represented in the areas in which we stay and the companies that we visit – the burgeoning middle and upper class, and the western, globalized portion of the Indian economy. Right outside our hotel is a Gucci store and each day a man picks up trash on the beach in front of our hotel to make sure our beach is clean. We are seeing Mumbai through privileged eyes and enjoying a middle to upper class experience in which Western ideals are celebrated.

The other India, the one we come in contact with when driving over slums and to some degree when we barter in markets and see beggers on the street exists beyond the outskirts of our portion of Mumbai. We visited two markets in Mumbai as well and I once again struggled with the concept of bartering. While I know it’s important to get the best deal for a product and not to overpay for a piece of cheap jewelry, it’s hard to remember that as I barter to reduce the price by Rs 50, which is less than a dollar for me, cutting into the sellers profit, and possibility effecting his ability to feed his children. As I have felt more comfortable in my surroundings, I’ve spent less time concerned about the fanny pack on my waist and more time gazing around the markets we tour. While I’m not sure if these vendors would live in the slums we drive over, they clearly are not making a substantial amount of money. Infused with the brilliant colors and spices in the Indian markets is a constant reminder of the poverty that permeates the lives of millions of people in this country.

Throughout the trip, I’ve been reading a book of essays compiled by McKinsey & Co. entitled Reimagining India. Almost every essay discusses the incredible opportunity in this country and amazing ability it has to bypass modernization impediments and emerge as a global power. While I recognize that the book is not ignoring the challenges I’m seeing firsthand, it’s hard to envision an India powered by smart cars and focused on clean energy when so many individuals struggle with malnutrition, lack of adequate access to toilets or clean water, and inconsistent electricity. At our visit to the Bollywood studio, Shantanu, the studio director discussed how the music he creates is a powerful change agent in India. While I agree with his notion that music can create hope and inspire people to hope for better lives, it’s also hard to imagine music filling the stomachs of the poor, hungry children we saw near the train station in Delhi and Agra or the begging people we’ve experience throughout the more impoverished areas in Mumbai.

India struggles with inequality even more than the United States with a high GINI coefficient. Home to the most expensive house in the world, Mumbai is the quintessential example of wealth disparity. Antilia, the billion-dollar house overlooks some of the poorest areas in Mumbai. As we drove by this incredible architectural feat, which only houses a few people, I remember feeling uncomfortable. To see such wealth next to such poverty is an experience that I will never forget. As the world’s largest democracy, India has a responsibility to remember those worst off as it continues to modernize and become a major competitor in the global market. At our DDB Mudra visit, we discussed how India is trying so hard to catch up to the West that it often skips steps on Maslow’s hierarchy of needs. While pushing towards self-actualization, India has forgotten to meet the basic needs of its poorest and worst off consumers. If the country is to create and sustain a level of democratic governance that is effective and that promotes growth, it must work on its vast wealth inequality and continue its focus on enhanced human rights.

However, as I highlight the challenges facing India, I have to reiterate a point made in my earlier blog. If just one thing has been made clear to me these past two weeks it’s that the Indian people are incredible. The entrepreneurship and basic yet crucial business skills present in the vendors at the markets we visit is incredible. While one could look at their tactics as slimy, I’m impressed by the bargaining skills the vendors have learned, not from traditional schooling but instead from experience. One vendor at a souvenir stall actually brought out a calculator and began debating my final offer while looking at his profit margin and calculating costs incurred for the good. While all of those calculations could have been completely made up, his use of business terms that I learned in my first semester Making Business Work class struck me. It’s entirely possible that he picked them up through media outlets or interactions with other foreigners, but at the end of the day, I think I paid more for my small statute of Buddha because I was so taken aback by his business literacy.

It would be a shame if I ended my discussion of the city of Mumbai without mentioning the Elephanta Caves and the Gateway of India. The bar for Indian architecture was set pretty high by the Taj Mahal, yet the ancient feel of the caves did not disappoint. As we sat and listened to our guide tell us stories about the god Shiva and the history of the caves, I was impressed by man’s ability to create and innovate, even centuries ago. The caves, carved completely out of rock, were created by simple chisels. In modern times, we often marvel at technological advancements, excited by digital media’s ability to track our likes and dislikes and an iPhones ability to store information or the ease of use associated with a Mac. Even coming to India, I was prepared to be wowed by the IT industry. As a student with a passion for the start up culture, particularly fascinated by the uses of social media and the technology industry, I thought that I would spend most of my time evaluating the future of this tech giant. However, the parts of the country that I have found most incredible, first in New Delhi and now in Mumbai, are the artifacts created hundreds to thousands of years ago by individuals who couldn’t have even dreamed of a Walkman.

I concluded my visit to New Delhi by stating that the past and present in India were at odds and that India needed to reconcile the two if it is to move forward. I still believe there needs to be a meeting of the minds, but instead of believing that the end result should be permeated by a lessening of old traditions, I believe that India needs to find a way to keep the incredible spirit, energy, and tolerance of the heritage that distinguishes it while removing cultural elements that hinder its progress.

Catching Up

The past few days have been so full and so exciting that I haven’t had a chance to blog that much so I’m going to try and catch you up in one post.

Friday

Friday began with a trip to Janpath market and my first test in using my negotiating skills. Spoiler alert – I’m not very good at it, at least in India. I kept converting rupees to dollars in my head and spending five minutes bargaining down from 200 rupees to 100 rupees for a silk scarf seemed ridiculous when I was still spending just over one US dollar. Luckily, I was walking around with a friend and she helped get me a few deals.

The market itself was incredible. Vendors from all walks of Indian life display they’re best crafts or in some cases marked down Western goods and fight to get you into their shop so they can try and sell you cheap earrings marked up to well above their worth or a pair of Indian pants you’ll probably never wear. The streets are crowded with children and adults trying to sell cheap necklaces, chess boards, and pretend snakes. I’ve never seen anything like it and despite the initial worry over the safety of my fanny pack, I loved it! We’re going to another Market in Mumbai and I can’t wait to pick up more trinkets for friends back home!

For lunch on Friday, we had our first American experience, stopping by McDonalds. At first I was excited to eat food I recognized as many of you know that I’m not the most adventurous eater. But honestly, I like the Indian food here much more. McDonalds is similar to America but very different at the same time, and whatever it is that makes it different does not agree with my stomach.

After lunch, we headed to Dalmia Continental, our third company visit of the trip, to learn about their olive oil brand Leonardo. The first native Indian company that we’ve visited, Dalmia Continental discussed the challenges and opportunities when introducing a completely new product to Indian consumers. When Dalmia decided to bring olive oil to India, they faced three major challenges. First, olive oil seemed too expensive for the common consumer. Second, many consumers didn’t believe that olive oil could be used for Indian cooking. Third, in India, olive oil was usually used for massages. In order to break those stereotypes and promote olive oil as a valid and healthy alternative to the cooking oils that most Indians use, Dalmia Continental had to generate consumer buy-in which it did through below the line marketing and education. By presenting olive oil and as a healthy and cheap alternative to the cooking oils commonly used, Dalmia was able to change its perception and gain a foothold in a market with endless potential. A large portion of this market foothold comes from Dalmia’s Olive Pomace Oil, which is not traditionally marketed in the United States or other Western Nations. Identifying the fact that not all products or marketing strategies work globally, Dalmia specialized its focus on the market it was trying to enter and crafted its message accordingly. Representatives also mentioned that they believe some of their success came from the Dalmia brand name in India. The Dalmia family has been involved in business since the 1930s and is well respected throughout India. Himani Dalmia, the Chairman’s daughter and our presenter, mentioned that these roots in the Indian business community gave their product legitimacy, as “fly by the night” companies with a sub-par product are a problem throughout the country. Additionally, VN Dalmia, Chairman of Dalmia Continental is a Darden alumnus, and we had the opportunity to speak with him and enjoy some of the Dalmia products.

The beautiful sunset from Dalmia Continental’s offices.

Saturday

On Saturday we traveled to Agra to visit the Deserted City and the Taj Mahal. My earlier notion of American historical inadequacy grew as we toured Agra and the Taj Mahal. The brilliant architecture in Fatehpur Sikri, also known as the Deserted City, was breathtaking and I was impressed by the detailed stonework and elaborate building schemes. Fatehpur Sikri was build by the Moghuls and was the capital city of their empire for many years. It was built by the emperor Akbar and was the home of his three wives – one Muslim, one Christian and one Hindu. Following our visit to Fatehpur Sikri, we ventured to the Taj Mahal – an experience that was the perfect mixture of ancient craftsmanship and the modern Indian crowds.

The Taj Mahal is ten times as picturesque in person as it is on Google Images or post-cards. When we entered the complex, I was immediately surprised by how white the marble is and the clearness in the sky surrounding the ancient wonder. A clean energy zone surrounds the Taj Mahal, so we had to leave our bus behind and take compressed energy cars to the actual attraction. The Indian government has set this zone in an effort to preserve the Taj Mahal, which is a UNESCO World Heritage site and a cornerstone of Indian history. As we approached the massive tomb, we traveled alongside camels, horses and more rickshaws like the ones we rode in Chandni Chowk. We visited on a particularly crowded day as the Taj had been closed the day before and for a few hours that day as a dignitary from a neighboring country was visiting. The line to enter the building at the local ticket price wrapped all the way around the Taj Mahal. We were lucky enough to be entering through a special line and therefore were able to see the entire Taj despite arriving late in the afternoon. As we slipped through each entrance and exit, having to split crowds in order to realize the privileges provided by our more expensive ticket, I felt the effect of being in a country with 1.2 billion people for the first time. There is no feeling like pushing through the gate at the front of the Taj Mahal while Indian guards push back crowds of people. It truly opens your eyes to just how massive the population of India is and how important relations with such a massive state is to American success. It also spoke to the inherent power and privilege granted by money and my Western citizenship. While I understood that for safety reasons with our large group, we have to take advantage of easy entrances and exits, but it is a bit unsettling pushing through a crowd of older Indian women and children as guards hold them back. India is a democracy, but that does not prevent it from struggling with some of the human rights issues that plague other developing countries. As we left the Taj Mahal, I began to compare my experience there to field trips I’ve taken in America. While I’d argue that I haven’t experienced an armed U.S. soldier physically preventing me or anyone else from exiting the Capitol, money and prestige buys certain privileges in America as well. However, the image of the Indian guard holding back a child will stick in my head as we continue this journey.

Camels at the Taj Mahal!

Before leaving Agra, we had dinner at Pizza Hut, my second American dining experience in India. Again, I would have been better off with Indian food. The menu was familiar but contained some foods with Indian influence. I personally stuck to tried and true classics, but there was an array of options. The one thing that did surprise me though was that at both places, we were served ice cubs with our drinks. As it seemed that these establishments served many Westerners, I assumed that they would be used to the request to forgo ice or ask before putting it in our cups. However, at both places, we were served ice. It may be because they have a superior filtrations system, but I wonder how many Westerners actually visit these locations or if they have become staples in India as well.

 

Sunday

Sunday we flew to Mumbai to start the second portion of our trip! Mumbai is completely different than New Delhi. Immediately, I could feel that it was much more modern and a cultural mecca. I’m excited to start part two of this journey and to see what else India has to offer!

Delhi Business Visits Day 1

A little smog to start off my morning.

Today was our second day in New Delhi and our first day of business visits. We started our morning at the JW Marriott, visited a high end mall, and finished our day at Cvent, a technology company based in Delhi and the US. While I found many things interesting today, I think the thing that struck me the most was how different corporate life is in India than the cultural experience we had yesterday. While both companies were clearly utilizing the “special sauce” that is India, they also felt very western. At Cvent in particular, I felt as though I could have been in Silicon Valley visiting a tech start up. I think that speaks more to the effects of globalization than the companies ignoring the cultural norms in India.

The GORGEOUS JW Marriott

At the JW Marriott, we discussed India as a growth market and the importance of understanding your consumer segments when marketing a luxury hotel. In India, and all foreign markets, Marriott manages but does not franchise, so owner relations are incredibly important. In India, with those relationships comes access to a plethora of possible guests.

At the Marriott, we also discussed the relationship between private and government investment in India, particularly in the area where the hotel was located called Aerocity. For an interesting article with more information on that development check out this link: http://www.indianexpress.com/news/aerocity-gets-its-first-hotel-11-more-in-queue/1198064/

While the government gets criticized for being inefficient and cumbersome with its regulations, Aerocity reminds me of the public-private partnerships developing in America to spur investment and growth. The one point that continues to be repeated at each company and historic site that we visit is that India is full of opportunity and areas like Aerocity are proof of that!

At the luxury mall we visited, I was surprised once again by the western feel. I’m not sure what I had been expecting but as I browsed alongside Indian consumers at MAC and Zara, I started to realize that my pre-India expectations were based in a American sense of superiority that is unfair in this global age. Consumerism in India is similar if not identical to consumerism in America. It doesn’t matter where you live – every twenty-something girl loves a good MAC lipstick. In fact, the mall was more impressive than any mall in America that I’ve ever been in. It was incredibly expansive, gorgeous and made shopping feel like a luxury experience instead of a hassle. A nice treat after the holiday shopping rush a few short weeks ago.

Cvent was the highlight of my day as tech start-ups are my latest passion. Their product, an event planning platform, is among the top in the tech industry when measuring revenue scale, high growth, and profitability- and the company was started by a UVA grad! Cvent differentiates its India strategy from other companies operating in India by saying that it is “owning India” not outsourcing to India. At first, I didn’t understand the difference, but as the presentation went on, I began to grasp how “owning India” meant making the employees partners in the organization instead of workhorses for the Cvent product. Many of the perks available in the Cvent Delhi office mirror things that you would see at Google or Facebook. Employees have access to a sick room, a full service cafeteria, and open seating that promotes collaboration. Originally, I was disappointed by the “American feel” to the Cvent office but now I find it exciting. Calling it an “American feel” relies only on my own experience and ignores the way in which that kind of workplace has become a global phenomenon. The fact that employees in India enjoy similar conditions to their counterparts in D.C. shows how far the tech industry has come from simply outsourcing to call centers to engaging Indian engineers as equals. Cvent might be an exception in India or it might be the way of the future.

I’m beginning to realize that India is at a crossroad between developing  the modern, capitalist business sector and protecting the cultural heritage that makes the country such a precious gem. At the moment, the two seem in conflict, but if India is to move forward and realize its full potential, it must find a way to celebrate the past while pressing onward to the future.

Welcome to India

What a journey the past 48 hours have been!

I left home on December 30th at 12pm to head to Dulles airport and arrived in Paris and then Delhi the next day, after flying for a combined 14+ hours. Thanks to my new international friends and the gracious Air France staff, I had two great flights – even including a surprise upgrade thanks to a friendly Air France flight attendant. It’s amazing what an extra two inches of leg space and four empty seats next to you can do to make a flight comfortable!

Today we had the opportunity to tour New Delhi and parts of Old Delhi. We began our morning at Humayun’s tomb, saw the Red Fort, Qutub Minar, Jama Masjid and the streets of Chandni Chowk. India is living up to my expectations of being like nothing I have ever come across before. Upon arriving last night, we went straight to the hotel driving through only a more developed area of Delhi where the embassies are located. While it clearly was not as developed as the United State, I was surprised by how Western it appeared and was a little afraid that I might not be exposed to the “real India” as our tour guide kept calling it today.

Our tour today proved me wrong. While there is a very western part of Delhi and most of the street signs are in English, the city is very much Indian and while we have not and will not travel through any of the worst Slum areas, it is evident how pervasive poverty is and how much they inhibit civil society from functioning. We are staying in a very nice hotel so we have few concerns about the constant flow of water and electricity but in India, these ordinary services that we take for granted every day are often unreliable luxuries.

Everywhere we visited, we attracted attention. On a surface level, a group of seventeen American tourists, camera in hand “oo-ing” and agh-ing” at the sites would be hard to ignore, but I think there is also a deeper interest in the west. One classmate from Ethiopia remarked that in his experience when “European-looking” people come to Ethiopia, there is an assumption that they are rich, powerful and important and he wondered if that held true in India as well. Going by the number of pictures one of my classmates has taken with locals, I’d say he might be right.

Just in one day, we have seen so much and done so much that I feel like this post is jumping all over the place. As I’m still incredibly jet-lagged, I won’t write much more, but I do want to share the highlight and most “native” thing we did today. On our tour, we stopped the bus after visiting Jama Masjid, the largest mosque in India and took rickshaws to the Red Fort, riding through the streets of Chandni Chowk and seeing Old Delhi unclose instead of from the windows of our bus.

That small red bike thing is what we rode on.

On that short ride, I experienced more culture shock than throughout our entire day. I also felt un-safe for the first time since arriving in India. While there is incredible poverty, in the areas where we have traveled, except for passing looks and the occasional comment, our group was mostly left alone. Riding through the streets of Chandni Chowk with one other student on the back of a contraption attached to a bicycle, I experienced the dangers of Old Delhi traffic, saw my first maimed beggar, and engaged with an authentic Delhi marketplace. I have never been surrounded by so many people before in my life, not even on the hill at the UVA-UNC football game (jokes…)

I’ll post some photos below of my first day here and continue with an update tomorrow!

Namaste India!

The day has arrived, in a few short hours I will be hopping on a plane, traveling for 19 hours and arriving in New Delhi, India – beginning the trip I’ve been waiting for all semester! While in India, along with experiencing the culture shock of a lifetime, I will be exploring how multinational firms engage in business abroad and the ways in which Indian firms and consumers differ in their promotion and consumption of products.

I applied for this January term after working with a Indian Social Enterprise through a UVA CIO Student Entrepreneurs for Economic Development (SEED). While researching how best to facilitate the enterprise’s emergence onto the global stage, I became fascinated with the intricacies of the Indian political and economic sphere. As one of the world’s largest and growing markets, India is poised for global dominance in the next century. As a student with interests in international business, developing markets, and entrepreneurship, this course seemed an ideal way to delve into the subject further. While in India, I hope to learn more about how technology is enhancing India’s growth potential and empowering its citizens to join the global market. I also hope to immerse myself in the incredible culture that makes India such a unique place.

For my parents sake, I will try to post daily (hopefully with pictures!) and shares stories, sights, facts, and insights I gain while abroad.

Goodbye America! See you soon!