Domestic Market Change As A Growth Engine For The Indian Electronics Industry
April 16, 2023
Written by: Rahul Srivastava
Azim Premji, an electrical engineering graduate from Stanford University, transformed a $2 million cooking fat business into a $8 billion revenue IT, BPO, and R&D services corporation. He became the company’s chairman about fifty years ago, and he turned it into one of India’s biggest publicly traded businesses. After the Indian government ousted IBM from the nation in 1979, Premji began integrating Wipro into the growing computer hardware and software sector. With 160,000+ employees and 840 crores USD in revenue, Wipro, owned by Azim Premji, serves customers in 175+ cities on six continents. He thinks that when put into highly charged teams, regular individuals can accomplish exceptional things. Currently, Azim Premji holds the positions of chairman and owner of PremjiInvest, the Azim Premji Foundation, and Wipro Technologies.
Indian electrical product evolution: When the economy was regulated, public sector enterprises like Bharat Electronics and then private companies like Wipro, HCL, and a few others satisfied the demand for electronic items. Even though the final buyer had few options, quality standards were never dropped. Indian businesses learned the subtleties of product development when creating computing and telecom goods for the domestic market, and they have since continued to innovate throughout the whole product development cycle. A tiny team of workers built solid foundations for the future throughout this time.
When the economy started to open up in the 1990s, these foundations turned out to be of enormous help. By this point, the Indian engineer had learned how to create high-quality items based on the newest architectural trends.
The product engineering sector hasn’t looked back since then. Expanding its fields of competence beyond the telecom and computing industries to include the automotive, medical, industrial, consumer, and, of course, mobile device industries. Additionally, these Indian businesses have figured out how to use the top techniques from all of the industries they work in. As an illustration, security applications are using the lessons learned from high-reliability automotive products to create a fail-safe environment.
The product design centres have been an essential part of the industry as India’s development as an IT hub over the years. both in terms of MNCs’ India development centres and outsourced third-party design studios. In recent years, both service providers with offices in India and the Indian Development Centres of global corporations have increased their efforts. For the past six years, the total amount of embedded exports has increased at a CAGR of around 40%. India’s reputation for offshore product development has now been cemented via its work in numerous industries.
India’s eco system has to focus on three essential elements for future development.
When we consider the contribution that product engineering companies make to global product engineering, the success of these businesses is evident. The approximately 1 million-strong worldwide electronic engineering team already includes nearly 100,000 professionals from India. Already, our nation accounts for 10% of the value of worldwide electronic engineering. In a trillion dollar business, domestic electronic product consumption is only approximately 2.5% of engineering value, which is 10%. How can we get domestic consumption to exceed 10% of global expenditures in the coming ten years as we continue to concentrate on raising design value to roughly 25%?
The Indian subcontinent doesn’t appear to have been much harmed by the product innovation cycle given that India provides innovative items to businesses and regions all over the world. The Indian engineer is more than competent of providing what is needed for the local markets here, taking into account the highly optimised processes and having comprehended the needs for the product architecture. The rate at which semiconductor and systems businesses have opened their own design facilities in India has surged in recent years. The design services sector will keep contributing to the expansion of India’s electronics industry and the country’s developing semiconductor ecosystem.
So what can companies with globally popular products do to expand their success to Indian markets?
What steps might be taken to be successful on the Indian market?
To be able to close the gap between customer wants and the products being sold to them, businesses must address three crucial factors, which I will now outline.
First, increased localization of products is one of the key factors in increasing consumption. The level of business involvement in product design for India needs to be higher. It is challenging for the designers to meet the desired expenses while ensuring that programmes are seamlessly integrated and that the user interface is appropriate, preferably localised. I understand that in the next ten years, the Indian mobile phone market would reach 450 million units. This is astonishing and is largely attributable to how carefully local market research was done by cell phone manufacturers and service providers. There are phones available at various price points and with features to suit practically every individual need. High-end PDAs and basic phones for technophobes are both available. Even the introduction of goods and services in regional tongues.
The users’ requirement for assisted adoption is the second characteristic. This year, the PC industry has had fantastic growth. According to MAIT Manufacturers Association for Information Technology, the first half of the year saw an increase of 11%. More than 7 million units are anticipated to be sold annually. As the personal computing sector continues to grow, I’d like to consider what made it all possible. The average man first learned about the PC at a tiny training centre in a neighbourhood of a city, no matter how big or little. Small but important steps taken by businesses and their franchisees enabled SMEs and households to recognise the advantages.
Schools, colleges, and government agencies have benefited greatly from the PC industry’s years of hard work in this area. Even if more work needs to be done, the outcomes are already becoming apparent.
Adoption that is supported extends beyond final users. In contrast to consumers in developed markets, many Indian businesses also require assistance in choosing the best goods and fixes for their issues. Many of the smaller office spaces lack IT wiring. Installing UPSs, wiring for UPS power, and network cabling all need time and money. By deploying WiFi-enabled networks and low-cost laptops in place of workstations, Wipro Infotech has assisted many of these customers in reducing their effort and expenditures on network and power infrastructure.
What investment can we make to enable the market, we must ask ourselves? Expecting a new technology to sell on its own would be unrealistic.
I see a third potential in the requirement for advanced business models. Additionally, a managed services model is starting to take shape here, where the design services partner does more than just collaborate on the product’s engineering. The partner is in charge of supervising the product’s manufacturing as well. Therefore, the success of the product will determine his success. The partner adds value by his familiarity with the regional market, his participation in the ecosystem, and his background in international product engineering.
The subject of innovation should be understood to mean that the methods described above did not emerge overnight from prosperous industries. The majority of these practises were developed by businesses that had a solid grasp of the final consumer and were grounded in reality. The strategies that were successful in other markets did not always produce the same outcomes here. They listened to their customers, watched how their products worked, and then took the concepts back to the drawing board. In other words, they went above and above to innovate their routine company procedures.
We are aware that innovation is not always significant, revolutionary, or transformative. Success ultimately results from small improvements made to a product, process, or business. Any organization’s success is largely dependent on innovation. Innovation is creative application. Innovation is expected to have a significant influence in the current environment. However, we must comprehend the ensuing fundamental principles.
First, we must make sure that management and technological innovation coexist. The advantages are lost when management improvements lag behind technological ones. It is comparable to an automobile with a strong engine but a shaky chassis. It cannot progress. Therefore, it is crucial for businesses to have a strong management foundation and a clear understanding of what customers want from their products.
Second, attempt to foster an entrepreneurial attitude within the company (among project teams and business divisions) that gives inborn innovators room to develop. Organisations must create a culture that prioritises upholding the rule of law, rewarding risk, and promoting entrepreneurship. The teams can only move forward and innovate if this.
Third, work together and innovate together in the changing ecology. Similar to how the era of the solitary inventor in the abandoned lab is finished. To get a great concept off the ground, the environment is unavoidably required. Keep in mind that firms are fantastic at improving but not so good at changing. For successful organisations, it is highly challenging to create disruptive breakthroughs that might jeopardise the foundation of their success.
In practically every industry that the businesses in this country are focused on, there is a sizable market for electrical items in India. In this situation, it’s crucial to demonstrate to the world that we have the resources and capacity to support the entire lifetime of an electronic product, including its design, development, testing, and manufacturing.
It’s time for today’s businesses to step up, work together within this ecosystem, and use innovation to create products for the Indian subcontinent.
Trusted by some of the biggest brands
We’re Waiting To Help You
Get in touch with us today and let’s start transforming your business from the ground up.