China and India have two of the most exciting economies in the world, but their unique situations require carefully planning by companies seeking to operate there.
The two most populous nations on the planet – China and India – also have two of the most exciting economies, with fast growth creating opportunities on an unprecedented scale. But entering these markets blind would be corporate suicide – and that’s why some the best minds in marketing, economics and psychology got together in a multi-disciplinary environment recently to swap ideas about the future of these, and other, developing markets.
The 6th annual China India Insights Conference, held earlier this month in the city of Lijiang in China’s Yunnan province, serves as a forum for academic scholars from diverse disciplines and research practitioners to share the best available research on both consumer and firm behavior related to China, India and beyond. Some of the presentations delivered included Leveraging social networks for technology adoption, The Month-of-Birth Effect on Entrepreneurship, and the enticingly named Tweets and Sales.
Pradeep Chintagunta from the University of Chicago’s Booth School of Business spoke highly of the event saying, “It’s a fabulous conference. One of the things the conference has done very well is bringing together a variety of perspectives on marketing which enriches our own learning, because broadening out all of our horizons is going to help us to better understand not only new customers and new markets, but also new perspectives of thinking about these different customers and markets.”
Chintagunta also noted the fact that marketers have to manage carefully the consumer bases in China and India, because they are constantly evolving. Meanwhile, Russ Belk from York University in Toronto highlighted the automobile and food industries among those that are rapidly expanding in China, but also addressed the need for Chinese and Indian companies to globalize, noting that while they have vast internal markets, they also have huge international markets.
“China and India are changing very rapidly, so to say that these economies are the future of consumption is not too far from being correct,” Belk said. “To ignore these markets regardless of the size of your business today is simply foolish.”
Sun Baohong, the Dean's Distinguished Chair Professor of Marketing at CKGSB and a co-organizer of the conference, stressed that social influence is very strong in China and India, adding that the two markets are both very innovative and open to academics and researchers. “It’s cheaper to run experimentation on a large scale and at a high level of accuracy, so that is an invaluable tool for marketing researchers,” Sun said.
Sun mentioned Chinese firms such as Taobao and Tencent as examples of companies who have expanded their operations in the US and will take on their global competitors directly saying, “They have built a flat, global platform for all the players to play together, so it’s not the concept of ‘China and India versus the rest’, now it’s everything. It’s becoming one world, and researchers in the future can study what kind of marketing opportunities are being created from both sides.”
Sun’s co-organizer, K. Sudhir from Yale SOM, pointed out that, for emerging markets, it is the transition of the poor becoming rich, the transition from market failures to market creation, and the move from a lack of institutions to the creation of new institutions, that needs to be studied. New tools and methods, he argued, need to be developed at this interface, because these problems have not previously been salient.
Sudhir also stressed that the role of the brand is different in China as opposed to the USA. “By looking at a period of transition and change, as there are massive increases in wealth, changes in urbanization, and movement across socio-economic classes, I believe we can get a deeper understanding of what causes and drives the differences across countries,” he said.
Other high-level attendees included Qian Yi, from the Kellogg School of Management, who highlighted the different areas of focus needed for success in developing markets. “China and India are very important to the field of marketing because a lot of consumers and multinational corporations reside in these countries, and it is crucial to understanding consumer behavior, business strategies and government policies in the whole marketing sector,” she said.
Carlos Torelli from the University of Minnesota was another speaker who shared his latest research at the conference, and noted that while China and India provide opportunities for companies operating in those markets, it also provides the two economies with the chance to level the global playing field.
“China has been developing a little faster than India, but India is as big, and there are a lot of people who need to buy many things – that’s what excites companies. But from the other perspective, there is an opportunity for China and India to add to the global cultural discussion and to the global construction of what globalization is all about, and there are many companies in this part of the world that I believe in the next 10 years are going to be playing a very main role in shaping what globalization means for the world,” said Torelli.