Over the last couple of weeks i have spent a lot of time
thinking about countries and their corporate ventures..
There are too many large enterprises in the us and europe..
Russia has its share of major ventures and the number of
oligarchs ,billionaires who own companies ,acquire companies
but leave the management to somebody else is just too high.
Japan has large auto majors and korea has its chaebols....
2 countries that are missing India and China..
Over the next few paragraphs ,i have tried to
trace the path that corporates in India and china
have traversed.
Indian entities like the tatas and the wadias are much older
than capitalism in China..Chinese industry grew largely due
to the huge domestic market.thanks largely to this demand
China today has global behemoths in Telecom and consumer
electronic goods..Once the demand from the internal
market was fulfilled ,the natural progression was to
spread the wings across the globe.That is precisely what
haeir,huawei and ZTE are trying to do.
In a short span of time chinese industry has come of age..
How else would one explain lenovos takeover of IBMs PC business..
I have been through business journals for 5-6 years now
and i never once have read lenovo being mentioned in the
same breath as IBM HP DELL APPLE ACER...but the little known chinese
company shocked the world..In a sense it was only logical..
China and India are probably the toughest markets in so far
as a manufacturer or a marketer was concerned.The dynamics
determining the sale of a particular product are too much.
Perhaps the concept of value for money doesnot play
an important role as it does in China..So a company
that mastered the chinese market was all set to take on the
world.But if people thought lenovos was a unique
case, more an exception than a norm, they were in for a rude
shock.Very recently CNOOC, a chinese oil major has bid $18.5
billion for UNOCAL.The other bidder happens to be chevron..
India ,if anything is only a comparative market..The cost
of labour ,cost of operations in the two countries are similar.
if anything they will only be in indias favour.Population,
pricing and issues are also similar..But do we have companies
that can put $18.5 billion on the table for a foreign entity..
With the exception of the undivided reliance empire and a few
oil psus ,no other company has a turnover in that region...
To be sure, indian companies are making global moves.But these
moves are of different league..these involve low key ventures,
foreign companies that are in the red and more importantly ,only
a few million dollars...The last few weeks have seen lots of
pharma acquisitions, 3 to be exact.Automotive manufacturers
have already made global moves ..but do they compare with China..
I think history has been more favorable to indian enterprises..
Francis scott key wrote the starr spangled banner in a ship,
that belonged to our own wadias..Wadias have just faded into the
oblivion now..The famous tea that was wasted in the boston tea party
belonged to the east india company..Any quizzer wil tell you, the
countless number of times he has faced these facts in a quiz....
All things being equal, Indian manufacturers have missed a great
opportunity.LG ,SAMSUNG and other foreign durable makers together
sell more than $4 billion worth of produce in India..An opportunity
that BPL VIDEOCON and ONIDA failed to use..NOKIA today is a billion
dollar biz in India..India has no indigenous producer of handsets
and other telecom equipment...this despite India being the worlds largest
growing telecom market..
Indian manufacturing story is only as towering an inferno as that
Arindham choudhary directed movie..Textile is one area where we had
significant advantages but Walmarts of the world source 100 times as
much in China as they do in INDIA..
I will sign off with a lot of hope..tatas are doing a lot of talking..
they have tetley..they have daewoos biz..They have acquired hotels
in New york..They are betting big on South africa..VSNL has completed
the acquisition of TYCO global..Reliance is also trying expand its reach..
They have acquired trevira and will complete the buy of flag telecom..
Waiting for the day when India inc will sign those mega deals
