It has been noted of late that the Korean firms, particularly Samsung and LG, among others have done exceedingly well in the Indian market, since they entered over a decade ago in the first flush of liberalization. After seeing it mentioned once more last month by the Innovations in Emerging Markets blog, the concept stayed with me, tickling my brain.
When I went looking for more information to see if anyone had articulated the ‘why’ of their success, in light of the spottier track record by other global brands in the same market, I came across this Newsweek story from late last year. Here are some key snippets,
Confucian Korea, multiethnic India: it’s not, on the surface, a natural match. Why the pairing works is a study in global commerce that offers lessons that non-Korean investors have already begun to heed.
Though their strategies differ in nuance, each of Korea’s chaebol (conglomerates) follows the same general game plan in India: intensively research the market, hit the ground running and localize, localize, localize.
Thus Hyundai developed a new car, the Santro, especially for the Indian market and achieved near-complete localization of its supply chain within its first year of production. They target specific markets, create new (sometimes, state-of-the-art) products to serve them and usually beat their competitors to the store shelves—the exact opposite of the one-size-fits-all strategy still common among other multinationals in India.
"We learned to treat Indian consumers with far greater respect than, for instance, a Japanese company was going to do earlier," says B.V.R. Subbu, head of Hyundai’s Indian autoworks. " ‘Good enough for India’ is the kind of approach they have had."
While there’s much much more I want to look into in this regard, and perhaps pull out key points, here’s the piece that really stood out for me, particularly in light of the conversations we have on this blog,
Arguably, Korea Inc.’s best weapon in the battle for Indian market share could be empathy. Unlike Japanese, British or American rivals, Korea is a newcomer to the club of industrial powers. Just 40 years ago, in fact, it was written off as a "basket case" economy incapable of advancement, a tag sometimes still attached to India.
Attuned to their own history, Koreans sensed a latent energy in India others initially missed. So rather than stake out small premium segments by catering to India’s tiny elite (as Sony sought to do with its high prices and products designed in Japan), the chaebol set their sights on a vast—yet, by Seoul’s standards, still poor—Indian middle class. "Korean companies gauged the potential of the country very differently," says Samsung India’s deputy general manager Ravinder Zutshi.
Empathy. The essence of successfully entering a new market, particularly one whose culture and society differ from those in your home market. Enough said.