“It’s always about opportunity.” That is what I tell people when they ask why, after having lived in China for 21 years, I moved to India. Having founded the professional services firm Dezan Shira & Associates in China 17 years ago and grown the firm into a regional powerhouse, I am now seeking new pastures by expanding the firm’s operations in India.
India is where the growth opportunities are now for a business like ours. China will continue to do well, but at a lower rate of growth. After all, it’s had 15 fantastic years of foreign direct investment and infrastructural growth, internationally recognized as “China’s Economic Miracle.” However, things always change, and new opportunities present themselves. Now it’s India’s turn. When I first started Dezan Shira & Associates back in 1992, I had left a nice job in Hong Kong, and everyone thought China was backward, dirty, difficult and communist. Life in Hong Kong was far easier and no-one wanted to be stationed in a China just five years after Tiananmen and five years before the British left Hong Kong. But I did go, and it was difficult in the early days. I learnt a lot, and ultimately became successful there. I leave behind a practice, of which I still am the majority shareholder, in very good shape and in excellent managerial hands. However, the new, developing opportunities are in India, and I get the same sense about India as I had about China in 1992. A sense that things are about to take off, and that no-one can really see it. India is often described to me as “backward, dirty, difficult and democratic” – ironically almost the same as China was back then!
The new India government has the potential to do for India what Deng Xiaoping’s reforms did for China in the early 1990s
One also has to ask “what are the fundamentals that are shifting India’s position?” and there are several. Firstly, the regulatory system that governs businesses such as ours, with our investments in both professional services and media are changing to be more favorable to foreign investors. Secondly, the country has enjoyed a mini domestic boom for several years now, and the Indian business community is confident and well educated. Thirdly, and perhaps this has been the missing component, India now has a government in place with a true mandate to reform and change. The election of the Congress Party with a de facto majority to push through reform has the potential to do for India what Deng Xiaoping’s reforms did for China in the early 1990s. The other issue to take note of is the increasing bilateral trade volume between China and India. We feel our presence in India can also leverage this recent phenomenon. With trade between the two countries running at US$60 billion in 2008, and increasing in leaps and bounds, a presence in both countries will help us plug into that and generate business.
China – India Bilateral Trade…An Opportunity That Didn’t Exist A Few Years Ago
The business model for India will be different to that of China. The bilateral issue is an opportunity that didn’t exist a few years ago. We’ve already secured work with the likes of Tata, Mittal and so on in China from our India base, and obviously we want to continue to promote bi-lateral trade. Plus the sensibilities are different. Indian businessmen by and large are more globally savvy than their Chinese counterparts, a situation that has evolved partly from the use of the English language and partly to do with India being a democracy. Chinese businessmen face far more Government interference in their work, although they may not fully realize it, and this ultimately hinders them on the global stage. Otherwise, we’ll be following our proven models of business with a handful of cultural adjustments. There’s no need for any major rethink in what we do, it’s proven to be successful and in demand. I recall China strategy a few years back and the “Things need to be done differently in China”. That had only a limited amount of truth, a good business model is a good business model wherever you are. Services we provide in India will be the same as in China; providing legal and tax advice to foreign investors, and later on when the regulatory system permits, an array of on-going accounting and audit services.
We set up five small offices across India three years ago, in different cities, to evaluate how they would perform and to learn about the dynamics of each specific location. These were in Delhi, Mumbai, Chennai, Bangalore and Kolkata. We also handled some early client work, often in partnership with local firms, to further learn about the market conditions. We began our India Briefing business magazine and website brand, specifically as a portal to gather knowledge and help us learn. That was very useful, and we’ve now made a significant investment in Mumbai, while retaining the other four offices, which we will roll out one by one over the next two-three years. India Briefing as a publication is now established and has been printed since early 2007. We need to build and develop that just as we did with China Briefing in China. We’ve been quietly in India already for three years, watching, learning and waiting for our moment, and that coincided with a corporate level decision for me to commence the full hand over of my China responsibilities to my team there. That took 18 months. So we’re a new market entrant in India with three years experience!”
You Can’t Manage and Successfully Direct a National Business from another Country
There are several reasons. One, in a market as important as India, you really need to commit and send over senior executives. You can’t manage and successfully direct a national business from another country. Also, experience. I was in China when it began to develop, and I see a lot of similarities. We need that experience in India, and not many people have that type of business knowledge, so it’s important for us I personally come here to direct operations, I’ve done it before. I’ve also been a long time in China, I’ve fulfilled my functions, and it’s time to hand over our China operations to a younger team who want to get on. People there who were regionally responsible are now nationally responsible, and every business needs to grow and develop staff in this way. Too many senior executives, especially business owners like me, tend to stay on too long, and I didn’t want to make that mistake. Finally, it’s also to give us a head start; not many senior executives will make that change, they’re too comfortable. Business isn’t about comfort; it’s about doing what it takes. So I move to India knowing that it will be very hard for the senior staff of my competitors to do the same. I suspect they are too comfortable where they are. Now there’s a challenge!
This article was written by Chris Devonshire-Ellis.
Chris Devonshire-Ellis is the founding partner of Dezan Shira & Associates and is based in Mumbai. He is also the owner of the publishing house Asia Briefing Ltd, which produces a variety of business magazines and news websites available to the international investor about India, China and Vietnam. Chris contributes regularly to the emerging Asia blog 2point6billion.com.
