Answer to Question #191692 in Economics for Tanmayee

Question

Why FMCG market in india is fundamentally different from UK.. justify the reasons

Answer 1

While India presents a good opportunity for doing profitable business, overseas and local corporations face tremendous difficulties in starting a business in the country. According to the 2010 World Bank Doing Business Index, India is ranked 133rd out of 183 countries for ease of doing business. This is the lowest among the BRIC countries. Low index values ​​on such parameters as starting a business, obtaining a building permit, paying taxes, securing business rights, and closing a business pushed the overall index downward. Obtaining a building permit takes about 195 days and includes 37 procedures, while the enforcement procedure takes 1420 days and 46 procedures.

However, on the other hand, India is in the top 50 for investor protection and credit availability. India is ranked 51st out of 139 countries in the World Competitiveness Index (published by the World Economic Forum) and is ahead of Brazil (58th) and Russia (63rd). However, India is still far behind China, which is ranked 13th.

India is a complex market due to regional diversity, urban-rural differences, a large informal market, and many legal and administrative systems. Moreover, the lack of necessary infrastructure conditions, bureaucracy, and corruption exacerbate the problems of doing business in India. Companies that understood the nuances of doing business in India became successful. For example, auto giant Hyundai was aware that Indian buyers placed a high value on the cost of maintaining a car. Hyundai has ensured high fuel efficiency, reasonable prices for spare parts, and a number of other changes to meet the specific needs of the Indian market. As a result, Hyundai has become a leading player in the small car market in India. LG, another successful foreign player in India, has invested in understanding the needs of Indian buyers. For example, LG introduced a 6kg washing machine instead of the 4.5kg model, taking into account the needs of a large Indian family. Thus, marketing analysis is very important for understanding the business environment in India.