India Global Expansion Playbook

Introduction

India has long been seen as a cost effective IT and BPO outsourcing hub for companies looking to diversify internationally. India is now building from this foundation to establish a world class technology ecosystem coupled with a large, growing population of 1.3 billion. Company operators looking to expand to India should establish a global expansion playbook in order to ensure a successful execution and growth.

Research & Budget

The beginning phase of any global expansion should be to first ask the question of why you are choosing a particular country over another. This can be accomplished through a combination of macroeconomic factors, target customer base, regulatory analysis, cost of expansion and go to market strategy. Once the reason has been established, a company should then turn to researching technical steps, including company incorporation requirements, tax regimes, and government agencies. For example, in India a local resident Director is required, the corporate tax rate is 19%, GST regulation was overhauled in 2017, each state has different regulations and all companies must register their employees in Provident Fund accounts. Once initial research has been completed, the finance team will create a budget, including items such as revenue targets, human resource costs, professional vendor fees, office space and marketing.

Legal Operations

The BPO industry in India has led to a strong talent base of professional service options. The issue Operators assessing partners in India must face is the volume of options presented. There exists many discount, seemingly cost effective vendors, but the lowest option is not always the best. India has a history of government bureaucracy and confusing paperwork so identify a trusted local partner is crucial. If companies choose to set up a local entity instead of leveraging an International Employer of Record (EOR) solution, then the corporate establishment process will need to take place before a local team is formed and sales can begin.

Go To Market

When creating a go to market global expansion strategy companies first determine if they will use a single country, regional or global from day 1 approach. Companies who decide to expand to India often treat it as a single country strategy due to the inherent size and complexity of succeeding. The relation between India and its neighbors, such as Pakistan, can be complex so India does not always serve as the best launching pad for a cross South Asia hub. By choosing one country or region to funnel resources to, you are forgoing the opportunity to gain learnings from other potentially high growth markets. Startups, Scale-Ups and even enterprise companies can benefit from leveraging lean principles for planning a go to market strategy. By launching a minimum viable product (MVP), often in the form of the product/service in the original home market, the local team can begin to gain insights from the reception of local prospective customers.

Hire A Team

India has a strong talent pool via its history in outsourcing, hub for US tech companies and repatriation population, all with experience interacting within global companies. In order to ramp up sales and operations, hiring a team with as many local nationals as feasible is recommended. Companies planning their India global expansion playbook will usually map out the first 10 hires during the budget phase. Common mistakes that globally expanding businesses make include insufficient planning for employer social contribution levels, termination protections, intellectual property protection and common vs. mandatory benefit programs. These can be mitigated through a combination of research and working with local partners.

Build, Measure, Learn

Once a team has been hired and the go to market strategy is established, company leaders should begin the lean cycle of Build, Measure, Learn. A common mistake made when expanding globally is not treating the local operation as a new startup within the company. This requires re-establishing product-market fit through MVP launches, data gathering and iterations. The problems of local India consumers will vary greatly from more advanced economies. On the ground research from first principles is a highly recommended approach to learning and establishing which problem you are solving for. Indian startup Doormint sought to solve the problem of on demand laundry but found that identifying the problem was more difficult than anticipated. By building a global expansion playbook that is tailored to India, companies can gain commercial growth.