On 11th November 2017, Mr. Mithun Kamath interacted with the student fraternity of T. A. Pai Management Institute on building business in emerging countries. Citing examples from his diverse experience of working in Africa, Latin America and Asia, he informed the students that the economic needle is moving towards Asia and Africa. He cited that the driving factors for this change were Scale, Socio-Economic conditions, Cultural conditioning, Languages and Strategy vs Opportunity.
He said that the disparity in population makes India a massive market which operates under a single currency. On the other hand, he mentioned that Africa has markets operating in 54 countries each with different territories and currencies. Mr. Kamath stated that in the retail sector, the profile of distributors, the number of employees, the transportation, etc. are deeply influenced with changes in the socio-economic conditions. He disclosed that in Latin America and Africa, retailers buy stocks for extremely short duration and usually stock up multiple times a day. The sub-distributors in S. Africa were not exclusive to a particular retailer unlike those in India. The Indian distribution and merchandising strategies he concluded, would, therefore, fail if applied in Africa and ergo these emerging countries.
Mr. Kamath went on to mention that 70% of adults in Latin America lack high school graduation leading to a huge talent crunch. He disclosed that the cost of living in Africa is 2.5 times more expensive than India because the majority of commodities are imported. He remarked that in Africa there are two types of companies – the ones who cater to the top of the pyramid and others who cater to the bottom of the pyramid, unlike India that has a middle-class market. Therefore, he enunciated, a completely different planning and strategizing was required to sustain in the emerging countries.
Mr. Kamath emphasized the importance of understanding the culture of the country you are working in. He reminded that it is important to understand the local languages and accept their beliefs which may be very different from ours. Also, he said that we as Indians try to utilize incremental methods of getting the job done as quickly as possible. “We don’t strategize but implement the assigned work. We seek direction. While this trait helps us earn our bread and butter, it is also the reason why we are second to major world competitors”, he explained.
He went on to say that we needed to realize our potential and enter the strategy phase of projects. “We have some major strengths like adaptability and hard work which we should use to improve our impact globally. We should stop following paths of least resistance and start building brands instead of providing labor”, he reminded.
Mr. Kamath emphasized the need for collaboration with locals of a country as a very crucial aspect of managing a business in various countries. According to him, International Business requires a good knowledge of acquisitions and joint ventures which is very different from the usual deal-making. Any strategy that we make, he pointed, has a very small shelf life in the global dynamic world.
Mr. Kamath concluded the discussion by emphasizing the need to be dynamic, understanding risks and failure and thinking out of the box. These, he summarized, would help us stay relevant.