Abstract

Great Growth Potential in Government, Corporate Markets

IT vendors have been interested in India's huge domestic market for many years now. India's enormous population - the second largest in the world - has been a big draw, but at the moment the main business opportunities are to be found in the state sector and in the corporate sector. Due to the government's aggressive promotion of IT development and the measures taken to attract foreign investment, the establishment of new industrial parks by the government, and the establishment of factories and R&D facilities in India by leading foreign companies have been contributing to growing demand in the corporate market. Significant business opportunities can also be found in the government's various IT infrastructure projects.

The successive tariff rate reductions that the Indian government has implemented in the last few years have helped to make foreign PC vendors more competitive on price. As a result, their share of the market is gradually increasing, with a consequent rise in demand for ODM/OEM services and for component supply.

Product Development to Match Regional Difference

The Indian PC market is unique in several respects, including the climatic conditions, the business environment, cultural factors, and infrastructure. As a result, PCs for the Indian market need to conform to the special requirements of the Indian market. For example, the power supply in Indian is often highly unstable, and the weather is usually very humid; PCs designed for the Indian market must combine low power consumption with resistance to dust, high temperatures, high humidity, and insect pests. In addition, Indian consumers are normally very price-sensitive, so PC vendors may need to keep their prices down, and devise special payment plans.

Due to considerable regional differences in India, knowledge about disparate consumer behavior that characterizes different ethnic and linguistic groups within India will play an important key to PC vendors. Insistence on treating India as a single market and implementing a uniform marketing strategy throughout the whole country will be a risky move.

PC Makers' Challenges in Indian Market

Companies seeking to develop an emerging market always have to deal with a wide range of imponderables. Therefore, a thorough risk assessment in advance is key to PC vendors planning to move into the Indian market.

Since India is still a developing nation, its administrative system and financial institutions do not always function in a very efficient manner. Meanwhile, the infrastructure is weak, and the complex tax system can cause a great deal of inconvenience for business enterprises.

Second, Indian consumers are highly price-sensitive, and PC distributors in India have not been able to maintain long-term collaborative relationships; therefore, a small difference in price will make them switch over to a different supplier.

Time-consuming customs clearance procedures are another crucial factor for the development of PC vendors in India. The problem may lead to inventory pile-ups and a consequent increase in operating costs.

Appendix

List of Companies