A country’s might or power is known by the products it produces. USA has been, for the past several decades, at the forefront of innovation, and have dominated our mind space as a superpower. Some products (and industries) that were revolutionized the USA over the last few decades have been cars, airplanes (commercial and defense), atom bombs and missiles, space age rockets missions, computers, fast foods (chains), Hollywood movies & pop music, etc. All these products have dominated the world and given America a larger-than-life image. If you look at it objectively, it’s a country’s products create and shape the image of a nation.
What is a high value-add product and how is it different from a commodity?
The word “product” is a very generic term, and everybody has their own interpretation of it. A steel producer would call their metal sheet their product and a farmer would call their produce of wheat their “product”. However, such basic products have very little value add (in raw material) and these can easily be replicated, and thus would rather be called a commodity.
In contrast, a service is a temporary act of delivering value. Like creating or customizing software for a client. In a service-oriented business, one generally leases their time and effort, and gets paid for it.
A high value add product is something where a lot of effort goes into research, testing, designing and finally producing at quality level, that is acceptable to customers, and which cannot be easily replicated by other competitors. An example in today’s times could be a car or a plane or microprocessor.
India and China have long been thought of as manufacturers of mediocre or low-quality products, and that is mostly true; however this is slowly changing now. Many Indian consumers want to pay a premium for quality, and many brands are striving for world-class quality.
What is a Great Product?
A great product is something that provides very high value to consumers and is at least 8 to 10 years ahead in terms of quality, design and value delivery than its competitors.
For example, Tesla’s Cybertruck is a great product, it seems to offer great value, and no other car brand or manufacturer seems to have a similar product that’s anywhere close. It’s very much like a next generation product like the F-35 (a 5th gen) Fighter jet produced by Lockheed Martin, which hardly has any competitors.
Products like these define a nation as they portray innovation. It requires a lot of effort to create a good product. A product consists of many subsystems and components. All these subsystems and components are part of larger design, and need to work seamlessly in order to work and deliver value to the end user. The more complex the product the more subsystems and components it would have, the higher value it would deliver.
A great product sometimes may just appear to be simple like a fast-food joint or toy block set, however to achieve scale and reach are the defining aspects of a great product. A simple food product like fried chicken, pizza, fries or burger may seem simple, but these products are almost irreplaceable and irreplicable. The product here is the supply chain and delivery process, as these global fast food joints have their own custom bread, chicken, pizza dough mix, custom variety of potatoes, etc. which make it impossible for competitors to replicate.
To be able to achieve this kind of high quality and scale, requires a great deal of investment in research, supply chain all with a product mindset. This is why some food chains achieve a global product status, while others barely move out their neighborhoods.
Do Indians Have a Mindset of Creating a Great Product?
Developing a good product requires a lot of investment and effort. As compared to a service the rewards are delayed, as it takes a lot of time for the product to mature and outsmart the existing competition, to be able to taste any kind of success. Most people and companies shy aways from creating or investing in a new product, and take the easy route of JVs, distribution and re-branding.
At some point of time electronics like TVs, VCR, Refrigerators, ACs, washing machines etc. used to be complex products, but over the years these have become commodities, as their designs have been simplified and easily replicated.
If you look around in the Indian market, you would find only a handful of complex products that are truly Indian and made 100% by Indians. I recall talking to the CEO of an Indian CCTV manufacturer, and when I told him that his company is one of the very few companies in India that make 100% proprietary products, he didn’t believe me at first, but then it was hard to name any true Indian product brands that really stand out and compete globally.
Based on my definition of good or great product, I will try to list down the top products that Indian companies and organisations have developed that we can truly be proud of.
Tejas Mk1 Fighter Jet
Very few countries in the world today have been able to develop a fighter jet. It’s taken a long time and investment for HAL and Indian Govt. to develop a product like this which today serves the Indian Air Force. I believe it’s one of India’s greatest achievements. There are other defense systems too like helicopters, missile systems, artillery, etc. however the Tejas Jet is the most complex of these products. Till date the IAF has inducted over 80 Tejas in their squadrons.
Mahindra Scorpio
This India designed SUV truly put India’s automotive industry on the global map, when it was launched in 2002. Since then Mahindra has come a long way forward and refined its products to world class levels, which later inspired others like Tata Motors to follow suit. Today Mahindra exports and sells its products globally where it competes with companies like Toyota, Ford, etc.
India’s UPI (Unified Payment Interface)
Now one may argue that an online payment transaction system is nothing new, but the scale at which the Indian Government has implemented and popularized this service, is nothing short of great financial systems. UPI has been built upon other systems like Aadhar and PAN, but a large-scale system like this is truly remarkable by global standards and scale.
Ramco Systems ERP
Now an ERP system may not seem too complex at first, but today only Ramco Systems competes with global ERP solution providers like Oracle, SAP, etc. One may find it odd that why aren’t giants like Infosys, TCS or Wipro in this product list, but the reason that these companies are focused on providing a service rather than creating their own ERP product solution.
The simple answer is that if you create a competing solution (or product) that you are currently installing or for your product suppliers like Oracle & SAP, you would lose their business. It’s very hard to forward integrate, as there is high chance of losing your existing customers and revenue. Most tier 2 automotive suppliers thus don’t venture out or even aspire to become a tier-1 component supplier as they would end up losing their current customers.
Bajaj Pulsar & Royal Enfield
Bajaj launched Pulsar 150 & 180, its first truly indigenous bike in 2001, that was designed and manufactured in India by Bajaj Auto. Back then it was a game changer, as it carved out a new market segment for itself of 150-200cc bike category which competed with Japanese brands like Honda. Today Bajaj exports its bikes all over the world and dominates the space under 200cc motorbike markets.
Besides Bajaj India’s Royal Enfield also made a name for itself globally and today they are the highest selling motorbike brand in the 250 cc to 750cc category in the world.
Special Mentions of Great Indian Product
Now my list should have been longer, but I’m not able to name any other company that has made a truly global product. However, there are special mentions for great product creations, but they are mostly supported by the government agencies like ISRO (Indian Space Research Organization’s) space programmes, Covaxin developed by Bharat Biotech in collaboration with the Indian Council of Medical Research – National Institute of Virology. I would have also included the Vande-Bharat Train Set, but I would like to say India is still playing catch up here.
These products are great, but they have a very limited application. These are definitely great accomplishments that have enhanced the image of our India greatly, however most of them have been led by the government. The private sector still lacks a product mindset.
What Should Indian Companies Aspire For
Having a product development mindset is a long term and high risk oriented approach for business. It takes a lot of investment to create a new product, then to further refine and mature it to be able to compete for a substantial share in an open market with international competitors requires tremendous effort. The chances of success are often slim, and one gets easily tempted to take the easy route of trading, contract manufacturing or JV.
To create a great product that can succeed internationally requires a lot of perseverance and grit. If you look at it segment by segment, Indian companies need to create products that can challenge international products like
- Japanese & German Car Brands
- Toiletries from Gillette
- Spectacles from Oakley & Ray Ban
- American Fast-Food Chains (KFC, Dominos, McDonalds)
- Microprocessors from Design & Manufacturing Companies (Intel, Nvidia, Qualcomm, Texas Instruments)
- Internet product/platform-based companies like Meta, Google, Netflix, etc.
- Computer operating systems developers like Microsoft, Apple, Google’s, etc.
- ERP platform developers like SAP, Oracle, etc.
- High Speed (250+ Kmph) Railways from countries like Japan, China, Spain, France, etc.
- Commercial Airplanes & Jet Engine manufacturers like Boeing, Lockheed Martin, Airbus, GE, Rolls Royce, Sukhoi, SAAB etc.
If you look at the list above, all these companies come from developed countries like the USA, Japan, UK, Germany, France, etc. Today we look at these companies as giants, and the thought of even competing with them scares us. Top 6 out 7 companies in terms of market capitalization in the world are product centric companies.
Even before Indian companies make an attempt towards creating their own product, our near sight financial gains that one can make from importing, overcomes our global product ambition.
So What Should We Do?
Recently I was in discussion with a retailer cum manufacturer of a lifestyle consumer product, whether they would be interested in creating a distinct brand, something which can compete internationally. What I understood from this second-generation business owners who’ family has been in business for over 25 years, is that their aspiration was to be like Vistron, which is a tier 1/2 contract manufacturer for an American electronics brand like Apple. Yes, those were his exact words.
I can understand this young entrepreneur’s point of view, who’s not aspiring big like Apple, and instead wanting to be safe by being a contract manufacturer. This aspiration is no different in Indian companies, as I have seen business papers and magazines lauding corporations like Tata becoming contract manufacturers of companies like Apple, however it would be disappointing if that’s their aspiration. Yes, it’s important to set up an electronics manufacturing ecosystem in India as it creates a lot of jobs, however it would be a crime not to aspire higher and create a products like Apple does.
So “Make in India” is definitely the first step towards creating a product, however Indian entrepreneurs and corporates need to have a much larger ambition of creating a global product and be not afraid to fail, and rather than be satisfied by just being a contract manufacturer.
As Indian citizen or company we should support Indian products, and this is something we just don’t do. I know how Japanese’s companies support each other and try to buy raw material for their own counterparts, despite operating in the open markets, even if there is cheaper alternative available. A majority of Americans prefer to buy American brands over imports.
Unfortunately, the same can’t be said about Indian citizens and companies, as we seem to be running behind foreign brands and cheaper sourcing alternatives whenever we get a chance. It may seem like a chicken and egg story about trusting and supporting each other, but we need to be much more patriotic than we think we are.
Abhishek Sareen is a sales & marketing professional with over 16 years of experience. He started his career as a management consultant at Kurt Salmon Associates and has worked in marketing & brand management, international business in sectors like precision steel tubes for automotive industry, consumer goods and retail.
He’s is a passionate cyclist and participated in several endurance competitive events. His interests are in behavioral psychology, economics and chess. He is a graduate in Computer Science and an MBA in Marketing. He completed his executive education from IIM-A in 2016 focusing on business strategy.