East India Company in Today’s Context – Part 1

I read article Chinese manufacturers up their game to conform to Indian standards. When the Indian government announced that only products with Indian certification standards would be favoured, Chinese started to register products under the scheme.  This is hidden message I read.

China players manufacture both high end products and low end products. They developed high end products used in USA  leveraging the latest innovation and follow matured processes following higher quality. China manufacturers understand that high end products cannot be sold in India at high prices due to affordability level of Indians. On learning the manufacturing process for high end products, Chinese manufacturers gain capability to manufacture items that can be sold at lower price adhering to less process maturity. Indians are offered these products at lower cost including low end products and high end products like computer, mobile and their accessories.

Today, a majority of electronic products purchased in India are made in China and not made in India. For years, Chinese flooded Indian market with cheap below radar products.  Chinese made goods are going for upgrades now.  More than 60% of the products registered with Bureau of Indian standards are “Made in China”. This indicates that Chinese have started to focus more to mature their processes to meet Indian standards.

Today Chinese have gained better understanding of the consumer pattern, preferences and their affordability of Indians. When Indians demand for standardized products, Chinese are geared to upgrade the products to suit to us.

Indian mobile manufacturers like Micromax have arrived and there is pride that local brand is now competing with brands like Samsung and HTC, the Micromax devices are made in China and not made in India. Good they have created the brand. They are sold in India have a good service support center network in India. Micromax like Indian players outsource customization of mobile operating system to Indian software setups and developed the marketing, sales and support network.

  • On thinking that Indian company have developed customization, support, marketing and sales network, I am reminded that  infrastructure is created to sell Chinese products and enabled to develop “Made in China” brand.
  • On thinking that Indian company developed for our own self instead of Western (USA and Europe) device manufacturers. Similar to Western folks manufacturing in China, we also manufacture in China, I am reminded that Western folks owned the patents and Indians do not own patent or the manufacturing capability.
  • The mobile operating systems and browsers are innovated in USA. There has been no progress done by Indian manufacturer in this area.
  • On thinking that Indian companies have developed ability to customize phones for Indian languages. This progress comes from softeware setups. The mobile keyboards in Indian languages are less in number and there is English domination.

Already Indian hardware imports are increasing and soon or by 2010, the intrinsic value of Indian hardware imports would surpass the Indian software exports.  If Chinese setup software shops in India (already they have), they gain ability to perform customizations for India.

If a Chinese company (listed in USA) purchases a company like Micromax, they gain access to support, marketing and sales network and they have their own manufacturing capability.  Do Chinese need any more red carpet welcome to flood high end mobile products in to India?

Here comes Xiaomi. They make high end mobiles in China and they leverage e-commerce market (flipkart) to perform sales and marketing to reach Indian population and use the lowest price as attraction factor. An artificial demand was created jointly by limiting the available inventory and also extensive marketing through all Indian media channels like newspapers and TV.  Now there is easy approach demonstrated to develop the sales and marketing network (cheaper than one created by Micromax) at lower cost and shorter time.

Indians are encourage to spend more with so called innovations in e-payment and e-commerce. Credit cards invite us to avoid feeling the pain of paying, and to forget how much money we actually have. Cash invites us to consciously feel how much we spend.Lot of Indians exchange their mobile phones once in every 2 to 3 years. Today mobile phones fail to work properly after 3 years, a trend different from earlier devices and one if forced to change. My TV and DVD player are more than 7 years old.  My CD-player, refrigerator and washing machine are close to 10 years old.  Why are we Indian spending more money on devices that are not made in India?

For me, the trade is definitely in favour of China and not India. In the future, instead of waging war against India, China would cut down the supplies to India and create constraints. Be ready when India does not manufacture its own goods and be dependent on other countries for products.

Today Indian who prefers to purchase a mobile that is “Made in India” cannot buy one. The choices are to live without mobile device or purchase “Made in China” device. Chinese are safeguarding their job, salary and also may be pension in future.