Ludo Chapman, MD of scientific equipment company, Grant Instruments, spoke at the UK India Business Council’s fourth annual networking summit in Manchester this week and traced his route from recognising opportunity to realising success in India for his SME business.
TM’s Jane Gray attended the UKIBC summit on Wednesday, March 14 and selected Ludo Chapman’s presentation as a highlight for manufacturing attendees. This article transcribes the presentation he delivered to attendees.
Grant Instruments specialises in the design and manufacture of equipment for sample preparation, scientific analysis, data acquisition and data analysis. The company was established over 60 years ago in Cambridgeshire where it is still based. In the last three years Grant Instruments has targeted India as a key growth market.
See more on Indian export opportunities in TM’s April issue.
For more information about the summit agenda visit: www.ukibc.com/summit
We’d been selling into India for many years on a very ad hoc basis. We picked up contacts at a few exhibitions and we were approached by individuals who wanted to buy our equipment to use in India, having already used it in the USA and Europe.
But really, we were getting nowhere. We decided we needed to start taking strategy more seriously. India represents a huge opportunity for us. There is a large pharma base over there which is a big customer base for us. There is also a lot of scientific research and many institutes which would use our equipment not to mention a massive education base.
Our competitors were already in there, so we needed to move quickly in order not to be left behind. Knowing this however, we were cautious of rushing in and trying to do the same thing as we had done in other territories like Europe and the USA. We knew our approach would have to be different but we weren’t sure exactly how – or how to do it once we found out.
We had no internal expertise but we developed a plan to lay out what we thought we needed to do. The first step of this plan was to seek the expertise that we didn’t have.
We were very lucky in this regard. One of our non-executive directors was ex-Phillips and he knew two ex-colleagues who had spent a lot of time in India and had set up a consultancy to help people do exactly what we wanted to do – which was to establish our brand in India.
There are many alternatives you can use. The UKTI can provide some fantastic services and UKIBC have some excellent networks. In addition there is a growing number of consultancies like the one we used – and who we are certainly still be being approached by – who are keen to lend their expertise and help.
Having approached our experts our next step was to take a careful and well thought through look at the market prospects and what the opportunities were in India. We could never have done this ourselves from the UK and having our consultancy expertise on board was essential. We also wanted them to have a look at our competition and what they were doing in the market – it actually helped that they were already there because we could learn from their mistakes.
Our consultants were out there and they did all this for us. They then produced a report that enabled us to build a strategy. This strategy was quite simple. We are a small company so we weren’t aiming to take over the world.
The three things that were recommended first and foremost were to establish an office. Then to recruit a local member of staff, with local knowledge who could provide us with support in the time zone. And the final thing was to establish effective distribution. We sell all our products, not to the end customer, but through distribution.
First of all, office and staff. We had been to India and sold our products but we didn’t know much about it. We had no contacts of any great worth other than our consultancy friends – so setting up an office and finding appropriate candidates to run it was pretty daunting for us.
Again our consultancy did all the ground work here for us. They looked at which would be the best city for us and determined that this would be Bangalore. They found us three potential office spaces there and they interviewed and shortlisted candidate staff for us.
Obviously this was all preliminary work and we wanted to visit ourselves to take the project forward and review our suggested candidates. What I would say here though, and it is a critical point, is that you must work to understand India before you get on a plane and go there.
The consultancy we used to review the market were able to help us with this to some degree, but we felt that it was so important that we employed a consultancy that specialised in cultural training. We wanted to understand Indian culture and the ways of doing business so that we knew some of the tips and tricks for getting on there.
This made a huge difference to us and it’s something I can’t recommend enough. Do that preparation before you depart if you haven’t been there before. One of the key messages during this training, and it has come out in today’s conference, was the importance of relationships. People are very important in India.
Practically, the training also gave us tips and thing to look out for – like the importance of giving gifts when you meet new prospective customers and warning that ‘yes’ in India doesn’t necessarily mean ‘yes’ as we would interpret it in the UK. It also introduced us to the concept of IST – Indian Stretchable Time – which prepared us to not expect everything to happen very quickly.
Having undertaken this training we determined that we would need around three weeks in India to develop our market research, to visit our potential offices and to interview and select a final candidate. Again, our consultancy helped enormously here. They put together a programme of visits to potential customers and helped us develop a work programme for the selected candidate for our India office.
I would like to make an important point here. We recently set up another office in China where we interviewed our local candidate over Skype. Never do that. It was completely unsuccessful for us – a nightmare – and we ended up with the wrong candidate for the job. It is essential to do this kind of thing in person.
The organisation of our trip was excellent – but it was a tough schedule and I would recommend that you find as much time as possible to give to your visit. We found that any day was only ever enough for one – perhaps two – visits or meetings. The country is huge and the transportation system is poor. We tried to pack a lot in and thought we had been very organised, but in the end we found that a lot of our meetings were extending into the evenings and that made it incredibly tough. Everything will take a long time in India.
We did establish a sales or liaison office however, and following this, the one thing that I would say we have found very difficult in India is setting up a bank there. We opened the office in 2010 and we are yet to set up a bank in India. I think the reason behind this is that we went with a different bank to that we bank with in the UK. They didn’t know us and they needed a lot of information about our business. This has taken ages to get done. We’ve had to send forms back and forth, take care that the most minute level of detail in the positioning of a photograph and your signature on it are correct. Be really careful of this. I recommend you stick with your UK bank.
Moving on to distribution. The initial market research really established the differences between India and the other territories we work in all over the world. When we got this research back it showed us there were 5270 distributors in India. That’s an awful lot. But none of those had a presence that was national.
Most territories we sell into has one big distributor we can sell through. Not in India. We had understood that this market was very dependent on local relationships but we hadn’t fully taken on board just how dispersed the distribution was.
Moving on, we knew that our key locations were the metropolitan cities. So we focussed on establishing a master distributor in each of these. We then had to organise to ensure that each of the market segments we were in was being properly covered in our key cities.
Trying to distil down 5270 distributors into a suitable handful was very difficult and daunting for us. A contact we made at one of the many exhibitions we attended in India proved key in helping us do this. He was responsible for organising scientific exhibitions out there and he knew all the distributors. Employing his services was a well worthwhile investment. We could never have done what he did ourselves – it was just too big a task.
Having confirmed that none of the distributors, despite their own claims, had a national reach, we selected local partners and determined to work regionally. It’s early days for us, but the approach seems to be a good one and what we are planning to do is to employ a kind of natural selection approach going forward.
We expect that one or two distributors in a couple of regions will rise to the top and prove themselves capable of distributing nationwide. From our point of view that is really important because we are currently shipping a lot of small batches to India and that is very expensive and inefficient. So ideally we still hope to end up with one distributor.
Once we had our selected regional distributors in place we put in place training from our local office and travelled around with distributor staff. And that is where we are today. Our sales are starting to grow as our brand establishes.
But just to finish off with what we plan for our next steps. At the moment we have a very weak brand. We have some presence with some important institutes, but we need to grow that and we need to support our distributors in establishing that. We need to set up more reference sites in key institutes and with key pharma companies so that we can take key customers to these and let them see our equipment in use. We need to attend more exhibitions and we need to invest a lot in marketing in joint venture with our distributors.
That’s step one in marketing. Then we will need to expand our staffing.
We will do this on a regional basis and will probably place staff with key distributors because we want to make sure they are focusing on our brand and not on those of our competitors which they might also be selling. If we put people into their distribution network we can ensure that that happens.
I hope we manage to develop a national distributor. But I have my doubts and so another thing we are looking at is establishing a warehouse to ship container loads or our product to and distribute from there. I have been speaking to UKTI about this and they are going to help us.
When our volumes are high enough we will probably want to looking at final assembly final assembly or manufacturing in India. That’s a difficult task in itself and we will likely want to find established scientific instrument companies already making their own equipment that we can joint venture with for distribution purely into India.
Just to finish up – what have we learned from our exercise of going into India? Be realistic and don’t expect the world to turn around overnight. It is a long process. India works on a five year plan. We are going to follow that and look at a five year scope for each of the steps of our strategy. We dont expect to grow massively very quickly. We have a long term plan and the most important part of that is relationships. These do not happen overnight.
To others looking at India as a market I suggest; try and use local expertise as much as you can. This conference is all about meeting those kinds of people and there are lots of people here that can help you. Those that are on the ground have the expertise. It is impossible to put yourself in the right position from the UK.
I also advise looking at your competition if they are already there. Go and find out as much about their experience as possible. They will have made mistakes and successes. Learn from those. Avoid the mistakes and build on the successes. Also, use UKIBC to network.
Most importantly of all, take time to understand the culture. It is absolutely critical. Respect that culture and embrace it. India is a wonderful place to be. It has fantastic people and fantastic food and religious aspects. I love it as a country. But you must understand.
Finally, although I have emphasized the importance of a local presence in India, the importance of having our team go over from the UK to support that local presence is also critical. I recommend that on a quarterly basis you go and visit and see all your key customers and distributors. It makes a real difference. If you don’t do it, they will forget about you and look at the other brands in their portfolio.
India can be very bureaucratic; be patient, work with it use the support available to help – such as that from the UKBIC and UKTI. If you are getting stuck find out how to get over the obstacles that are in your way.
India is certainly the biggest opportunity to a small company like mine, and I recommend it highly. Thank you very much.