Yue’s Yappings

My sales territory covers Asia, including both China and India. For the past year and a half I’ve focused on east Asia - China, Taiwan, Japan, South Korea, etc. Part of the reason is that the RFID market is more mature in those countries. And part of the reason is that I had existing connections in China and could get started more quickly.

But now its time to focus on India. I know very little about India, and have not yet visited it (that will change this fall). But after talking to a few customers in India, I’ve already learned a few things:

Religion

Indians are a religious people - for many, religion is a way of life. In most parts of India, Hinduism is the dominant religion. There are many gods in Hinduism, and each god represents a special character, such as intellect, kindness, beauty, etc. For example, the god Ganesh, a very popular one, stands for intelligence. You pick a god based on the attribute you want to have, and then you worship that God. And if I understand correctly, you eventually become like a god (Indians believe there is a god in everyone).

Now contrast that to China. Chinese are not religious. And in fact, a popular saying these days in China is that “Money is God.”

Population

By population, China is the world’s largest country. But not for much longer. Unknown to most foreigners, China’s one-child policy has been very effective. The average birth rate is now 1.7 per couple, well below the replacement rate of 2.1. The Chinese population will peak within the next twenty years and will then start to dramatically decline. Even today, only 20% of the population is under 15.

That means China is in a race against time - it must get rich enough, quickly enough, that it will be able to support the world’s largest aging population. If you think Japan is struggling today, or the United States will in the next twenty years, just think of China, which is much poorer and has no social safety net.

As large population in China are getting old, India is getting younger. Its birthrate is an astronomical 3.1. It is a much younger country than China, with 30% of the population under 15. With already over a billion people, it boggles the mind to think how India could possibly cope with such a gigantic, growing population.

Gender Makeup

Both countries prefer males over females. In China, the ratio of male to female babies is 120:110, which means 8.3% of males won’t able to find a wife. I don’t know the ratio in India, but I understand it is similarly skewed.

Unfortunately, single, young males tend to be disruptive in society. How will these two countries deal with such a huge social issue?

Cheap Labor
With such large populations, both countries have spades of cheap labor, thereby making them attractive investments to western companies.

India has excelled in IT outsourcing, partly because English is the official language thereby removing a huge barrier to communication. Of course India doesn’t have much choice, since its infrastructure is so dreadful that it would be outsource manufacturing to it.

China, on the other hand, has become the low cost manufacturing center for the world. This is partly due to its connections to Taiwan and Singapore, which share a common language and industrialized well before China. In addition, China has spent huge sums of money upgrading its infrastructure. Parts of eastern china are as advanced as the United States - huge skyscrapers, interstate highways, maglev trains, new ports, etc. Of course the farther you get away from the coastal cities, the more dire the infrastructure gets. But overall, the infrastructure in China just works, and its getting better all the time.

Summary

I can’t wait to visit India in the fall, and learn a little bit about what its really like to do business in India.