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Into India

1 Apr, 2008 By: Doug McPherson Response

When it comes to Asia, China is far from the only game in town. In fact, some say India is the new hub of growth, and that it's giving China a run for its money as the place to do DRTV business.


Partnering to Profit


So how do DRTV marketers capitalize? In a word, partner — at least for now. The stumbling block to go it alone is foreign direct investment (FDI).

Vinod Agarwal, with TV Skyshop, a DRTV company in India, says the Indian government doesn't allow FDI in the retail industry and that DRTV companies will need to partner until that changes.

Ghai says some networks are establishing home shopping ventures. A good example, she says, is TV18, a business news TV channel that's collaborating with CNN and is leveraging the partnership to build credibility. "It appears, at least from a creative standpoint, they are on the right track," Ghai says.

She adds that India is improving by opening up more FDI, but that many of the sectors haven't done that, which means joint ventures continue to be necessary. "But many, many sectors will open," Ghai adds. "We recently saw more allowance in the oil, gas and energy sectors."

Ghai also reports that FDI is expected to reach $25 billion this year, an increase of 25 percent. "In terms of total FDI flow, India is far behind China, but on the basis of long-term potential, India signifies a better prospect for foreign investors," he says.

Nevertheless, Ghai says that like everywhere else, DRTV and infomercials have a poor ranking among consumers and they're suspicious of quality and credibility. "I believe it's up to individual companies to change that perception by producing high quality content, great and genuine products with excellent customer service," she says. "I believe foreign entry into the media space coupled with [established] companies will ... help raise the bar or at least provide consumers with a fresh alternative."

And Agarwal recommends DRTV marketers in the United States lower their profit margins. "They need to understand that high taxes force Indians to be price conscious," he says.

Yet Agarwal adds that the Indian retail industry is "booming at the moment." And the outlook over the next three to five years is that India is poised to grow by $250 billion (U.S. dollars). "DRTV can definitely take a chunk out of that pie," he says.

Israni and Ghai are equally optimistic. Israni says India is "one of the most stable and profitable emerging markets" and that economic growth is in the 8 to 9 percent range.

"We've only just begun," Ghai says (she admits she's a Carpenters fan.) "There is plenty of opportunity in almost everything."

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