Month: January 2020

Why Australian schools have missed out in India and 7 steps to succeeding there

Demand for education in private international English-medium schools in India is soaring.

Despite this, few if any Australian private schools and school product providers have made inroads into India.

One of the barriers is what I call the “agency thinking” of education – just appoint lots of agents and the business will flow. Maybe – but India is a relationship country and you only become a big player through relationships, not through agency.

Indian nationals in the more expensive private international schools with fees above USD$10,000 make up 43 per cent of students. That’s high. As India’s middle class expands, this figure will also rise.

It is a great opportunity for Australian school education – our whole education system is well regarded in India.

The main international curricula offered in India are the International Baccalaureate (IB) curriculum and the Cambridge International Examinations.

Here is the bad news – no Indian schools are offering the Australian curriculum. Why not?

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I have long advocated a “partnership model” for market entry into India. I recently conducted research on “partnership and collaboration” opportunities in the horticulture sector and this is looking much more positive than simple going to India for a quick sale.

This strategy has also been endorsed in the Final Report International Opportunities for Australian School Curriculum, Assessment and Regulatory Products; Australian International Education: Enabling Growth and Innovation – NSW Education Standards Authority and Nous Group January 2019 – “Given the size and complexity of operating in India, a partnership approach could assist Australian agencies and providers in developing market opportunities.”

Australia is much more “transactional” than we like to think. That is why we have not done well in Indian schooling.

Keep in mind there are many barriers to market entry.

How do you create a “partnership model”?

  1. Of course, do your homework, which means pay for expertise to deliver real on the ground opportunities in India, which might include exchanges, curriculum, technology or some form of JV with an existing school or group
  2. Build relationships – which also means take your time, budget for the long road
  3. Look in the developing sectors, such as Smart Cities, new cities, redevelopments and the property landscape
  4. Create relationships across all areas of the education sector – governments (central and state), schools, advisors, curriculum, technology providers and more
  5. Leverage existing Australian university relationships in India
  6. Always, where you can, build a local Indian presence, because this above all else signals that you want to be a genuine long-term partner
  7. And always, where you can, build your presence through a Joint Venture with a respected Indian brand in your sector

India’s FMCG market to grow 9-10% this year

Are you an FMCG exporter? Is India part of your plan?

According to market researcher Nielsen, India’s fast-moving consumer goods (FMCG) market is expected to grow 9-10 per cent in the January-December period, matching the expansion rate in 2019.

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There are two shifts in the Indian FMCG market – one is to branded products and the other is to online e-commerce.

A shift towards branded products has been driven by the GST.

“Following the implementation of GST (Goods and Services Tax), a lot of unorganised players have exited the market across different FMCG categories,” said Mr B Sumant, ITC executive director of FMCG. “As a result, there has been a clear shift in consumption trend from unbranded to branded products.”

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Pictured above – the top Indian FMCG stocks

FMCGs can be divided into several different categories including:

Processed foods: Cheese products, cereals, and boxed pasta

Prepared meals: Ready-to-eat meals

Beverages: Bottled water, energy drinks, and juices

Baked goods: Cookies, croissants, and bagels

Fresh, frozen foods, and dry goods: Fruits, vegetables, frozen peas and carrots, and raisins and nuts

Medicines: Aspirin, pain relievers, and other medication that can be purchased without a prescription

Cleaning products: Baking soda, oven cleaner, and window and glass cleaner

Cosmetics and toiletries: Hair care products, concealers, toothpaste, and soap

Office supplies: Pens, pencils, and markers

Shoppers in India are leaping from buying unbranded at “mum and dad” stores to online purchasing.  

The most popular e-commerce categories, not surprisingly, are non-consumable goods—durables and entertainment-related products. The online market for buying groceries and other consumable products is growing, as companies redefine the efficiency of delivery logistics which shorten delivery times. While non-consumable categories may continue to lead consumable products in sheer volume, gains in logistics efficiency have increased the use of e-commerce channels for acquiring FMCGs.

January 26 – Australia Day and India Republic Day – best wishes to both!

Australia and India have much in common – British heritage, democracy and love of the game of cricket.

But we also share a day of national celebration.

January 26 is Australia Day and India Republic Day.

Hope both countries fully enjoy their celebration and best wishes for 2020.

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Amazon is backing India to the hilt

Pictured recently in India – Amazon CEO Jeff Bezos with Amit Agarwal, senior VP & country head, Amazon India, during the Amazon Smbhav event at the Jawahar Lal Nehru stadium in New Delhi

Amazon.com Inc Founder and Chief Executive Officer Jeff Bezos said on Wednesday that his company would invest an additional $1 billion to help bring small businesses online in India, and also committed to using the retail giant’s “size, scope and scale” to export $10 billion of made-in-India goods by 2025.

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Bezos has faced some problems in India, but he is bullish and active.

Seeking to reach out to critics, Bezos, donning traditional Indian attire, said his company was committed to be a long-term partner of India.

Bezos was into India so much – “I want to make a prediction for you. I predict that the 21st century is going to be the Indian century.”

Why? “The dynamism, the energy… everywhere I go here, I meet people who are working in self-improvement and growth. This country has something special, democracy,” he said.

Bezos contradicted my recent blog (India and Russia the closest relationship on earth) – “I make one more prediction for you: In this 21st century, the most important alliance is going to be the alliance between India and the US,” Bezos added.

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The firm aims to digitise 10 million MSMEs with the proposed investment. In addition to providing training and enrolling MSMEs into its programmes, Amazon will help them work on cloud technology through specialised Amazon Web Services offerings at low costs. It will also establish 100 “digital haats’ in cities and villages throughout India.

Amazon has invested $5 billion in India in the past five years. The e-commerce platform also announced plans to support local neighbourhood shops and kiranas. It will expand its Amazon Easy programme.

In many ways, India retail is leapfrogging from the corner store to fully online.

For those in the FMCG sector this is a pretty exciting opportunity. Time to get your India strategy right!

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What does the close relationship of India and Russia mean for the rest of us?

India is very close to Russia. Few people in the west know this. The two countries have built close strategic, trade and cultural friendships ever since India gained independence.

So what? We’ll get to that soon.

The Russia relationship was reinforced this week when India’s Minister of Petroleum and Natural Gas and Steel, Shri Dharmendra Pradhan said, “2019 was a landmark year which boosted the bilateral relations between India and Russia to hitherto unscaled heights.

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The special and privileged strategic partnership between our two countries was strengthened significantly. Hon Prime Minister Shri Narendra Modi has described Russia as a reliable partner and a special friend and President Putin in turn has talked of taking India-Russia relations to new heights of cooperation.” He said.

Getting the picture? There’s much more.

He went on: “It is uncommon to find two major powers that have developed a partnership such as ours.”

He wants it to go much further.

Example one – coking coal – “We recognise the immense potential of Russia in supplying coking or metallurgical coal, which is largely imported by India, to support the Indian steel industry.”

Example two – inland and port logistics (does this remind you of Belt and Road?) – “I had requested Russian authorities to invest in developing the inland and port logistic of the Far East, improve connectivity of these ports with mining locations and improvements in evacuation infrastructure.”

Example three – oil and gas – “There is an ‘Energy Bridge’ between our two countries. With Russia being one of the largest producers of oil and natural gas and India being the world’s third largest energy consumer, Russia has the potential to become an important source to fulfil India’s oil and gas requirements.”

Example four – investment – “We invite investments by Russian companies in Indian oil and gas sector, particularly in gas business, gas infrastructure and petrochemicals.”

Example five – sea routes – “We are keen to explore the new sea route to source crude oil and LNG through Russia’s Arctic. A sea line between Far-East Russia and the East coast of India will also facilitate sourcing of coking coal from the region.”

Example six – crude oil – “We are working on the strategy to diversify our crude oil supply sources and we are now exploring ways to import crude from Russia as well.”

So what?

While many countries (such as Australia) have a black and white, goodies and baddies view of the world, India manages to live comfortably with multiple regimes. To get on with India and do the deals we want, we (Australia) need to adopt some of this thinking.

Let’s work on the answer to this one – what does the India-Russia relationship, one of the closest on the planet, mean for the rest of us?

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10 reasons to look again at India in 2020

Dr Mark Morley is an Australian Trade Commissioner in India. In the last twelve months, like many of us, he has changed his view of Australia’s prospects in India. Why?

Here are 10 reasons to change – taken from his writings:

  1. Indian tourists coming to Australia has for the first time beaten the number of Aussies going to India – there were about 350,000 and each of them sees “clean and green” and innovative Australia first-hand. Plus, more than 700,000 Indians live down under.
  2. Across India, Australia has a great reputation for clean, safe and reliable supply. We are well known as a premium supplier of produce, and we have a global reputation for our quality brands.
  3. India’s ease of doing business and transparency has improved, its regional infrastructure – including roads and airports, as well as its cold chain – is improving, it now has a national GST alongside unified regulations around food importation and labelling, and a hungry entrepreneurial scene that is looking for international brands.
  4. Most importantly, and this is the game-changer for Australian FMCG producers, it has unified, national (or near national) platforms for Australian companies to connect their products with consumers. Can you believe this change? India now has a platform for Australian companies to connect their products directly with consumers.
  5. Amazon, as well as other platforms such as FlipKart and niche online marketplaces such as NetMeds, have turned the retail environment on its head.
  6. The scale and scope of the opportunity in India is now hard to ignore: Amazon India can deliver to 50% of all postcodes in India within 3 days of order, and 100% within 5 days.
  7. The Amazon platform is currently adding 200k+ Stock Keeping Units (SKU) every day, joining the 170 million SKUs already present on the site.
  8. With the cheapest mobile data accessibility in the world, 85% of Indians access online platforms via their mobile devices. This has huge implications for a market of more than 1.3b people.millennialsphones
  9. Mobile accessibility has meant that the modern retail format in India has been largely leap-frogged. Greater connectivity, greater receptivity to international brands, and greater opportunity for Australian exporters.
  10. India is a global player. But it’s not China (and that’s important for many of you with lots of eggs in the one basket). So, hasten slowly.

I would add to this list that India has 450 million millennials (those aged around 21 to 37), more than any other country and they will not live, learn, watch, listen, consume, travel, drive or behave like the previous generation.

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Why not start a conversation with Mark? Email  mark.morley@austrade.gov.au

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The Belt and Road Initiative and the Geopolitics of the Indo-Pacific Region

David Morris is a former Australian diplomat and current expert/advisor on regional issues, risk and international relations. He recently wrote on “The Belt and Road Initiative and the Geopolitics of the Pacific Region” published in Research on Pacific Island Countries, Social Sciences Academic Press (China), 2019.

The Belt and Road Initiative has become associated with a geopolitical “China threat” discourse in the South Pacific, he writes.

Are China and Australia, the dominant regional player in the South Pacific, driven by geopolitical imperatives to compete for power? Or do their different geopolitical needs provide opportunity for cooperation that is mutually beneficial and manages risks in the region?

As a commentator on India and the Indian Ocean, I can see much of what David Morris writes could be applied to the Indian Ocean rim countries.

Morris analyses supposed Chinese “threats” as well as risks to China, including fears of a military base in Vanuatu, Chinese debt-funded projects in Tonga and closer economic cooperation with Papua New Guinea.

He concludes that it is feasible for Australia to meet its geopolitical imperatives if its regional security leadership can be maintained.

A geopolitical analysis of China in the South Pacific concludes that China is unlikely to seek regional security leadership if it can ensure access to trade routes and markets.

If Australia could move beyond geopolitical rhetoric, it should therefore be possible for Australia to partner with China to support sustainable development, mitigate risks and ensure broader stability of the South Pacific region, he writes.

With large doses of common sense, Morris writes that Australian activity could be complementary to China’s BRI, and that while there are political risks, the two countries could cooperate to reduce risk and ensure projects are sustainable.

This would be great – but my view is a big barrier to anything Australia does in our region is always its world view of “goodies and baddies” with the USA as the major “goody” and China the current “baddy”.

It would be great if influential countries like India, Australia and China could create a new collaborative model that brings real development to those poor communities in our region.

Is this possible?

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India launches Artificial Intelligence knowledge centre for NSE

India’s National Stock Exchange (NSE) has launched a Knowledge Hub in New Delhi, an Artificial Intelligence (AI) powered learning ecosystem that will assist the banking, financial services and insurance (BFSI) sector.

India has two major stock exchanges – the NSE and the Bombay Stock Exchange.

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Speaking on this occasion Commerce & Industry Minister Mr Piyush Goyal (pictured above right) said that although India has developed as the second largest fintech hub in the world, a lot of work still needs to be done in the BFSI sector. He hoped that the Knowledge Hub created by NSE will fill in these gaps and help the financial sector to move into the future.

The NSE Knowledge Hub will enhance skills and help academic institutions in preparing future-ready talent for the financial service industry. It is also available on mobile and attempts to bring together world class content and learners through this state-of-the-art and future-ready platform.

The use of AI will ensure that the skill upgrade is affordable and accessible. Piyush Goyal said AI and Machine Learning will contribute US$ 1 trillion to the Indian economy by 2035.

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Is India really growing? Hyatt Hotels think so, adding 11 new hotels in 2020

Hyatt Hotels is bullish on India and plans to open 11 new hotels across India by the end of 2020.

Hyatt now has 32 hotels across 20 destinations under its eight brands in India – I recently stayed at Hyatt Regency in Chandigarh and it was an outstanding hotel – well located, good food and beverage service and everything went smoothly.

The hotels at Thrissur, Kochi, Jaipur, Dehradun, Trivandrum and Udaipur will be under the Hyatt Regency brand.

India is a very important market for Hyatt. It is one of the top three global growth markets for the company after the US and China and there is a huge scope of growth as the demand still exceeds the supply.

So, for Hyatt, in 2020 India is a growth story.