India is one of the fastest-growing economies in the world. Many Western exporters have shifted their focus here, and Lithuanian exporters have noticed and begun taking advantage of this trend as well. A massive threefold surge in Lithuanian exports to India was recorded last year.
According to Laimonas Talat-Kelpša, Lithuania’s ambassador in India, many Lithuanian entrepreneurs are only now beginning to see the potential of the Indian market for them, but several large-scale contracts have already been signed, improving Lithuania’s economic statistics.
Meanwhile China has long been enticing Lithuanian exporters, many of whom are going to the annual export-import fair in Guangzhou, which will take place between 15 April and 5 May. The annual event draws more and more Lithuanian companies each year.
Between 2009 and 2014, Lithuania’s exports to China have grown almost five times. Last year, it amounted to €102.4 (equal to about one seventh of Chinese imports to Lithuania, at €725.3 million), or 0.45% of the total.
According to Danas Vaitkevičius, an advisor at the Lithuanian Ministry of Foreign Affairs‘ export and import promotion division, while China’s population offers near-limitless potential for business expansion, it is not an easy market to enter. He said that “companies that want to expand their business in China must arm themselves with patience and prepare themselves for consistent and long-term work. Moreover, before starting, it’s important to research specificities of doing business in China.”
Guido Wolf, the founder of the China and Baltics Business Club, insists that China remains an important import and export market for Europe, despite its economic difficulties. “You must adapt to a constantly changing market and change yourself. Whatever the case may be, the main thing is to form personal relationships – this is still the first step that every businessman must take in order to succeed in China,” he said.
Vaitkevičius agrees, saying many Lithuanian businesspeople initially underestimate the importance of personal relationships in China. “The Chinese prioritize these relationships. You will be interesting to the Chinese as a business partner to the extent they take interest in you as an individual: your interests, family or even favourite football team. You should avoid fast and ill-considered decisions and not be tempted by offers that look very attractive – you should only make a decision after analysing your potential partners and their offers.
“Also, don’t think that you will be able to easily transfer the business model that worked for you in the West to China. It’s better to meet the market’s requirements and specific needs of the consumers. When developing business in China, it would be useful to involve that country’s business representatives or experts that have experience in the market,” he said.
According to the organisers of the fair, 177,000 international buyers visited the fair last, concluding deals worth $27 billion. 120 of these buyers were from Lithuania.
When in India…
Ambassador Talat-Kelpša had similar advice for Lithuanian entrepreneurs looking to make inroads into India’s market. According to him, many Lithuanians are too used to Western trade models.
India is currently undergoing important and sweeping economic reforms, and the consumption-oriented sector of the market is growing. India’s middle class, which is capable of buying imported products from Lithuania and elsewhere, consists of about half a billion people. India’s improving economic conditions mean that this segment is poised to grow even more.
Last year, Lithuanian exports to India totalled €50.9 million. While it represented only 0.2%, it was three times more than in 2014.
Talat-Kelpša says that this growing market may be enthusiastic about products that Europeans consider commonplace. Several years ago, Indian consumers were introduced to chocolate butter, something they had not been used to before. Now, Talat-Kelpša says, the product’s popularity has exploded, with sales are growing exponentially. Investment into promoting the new product paid off.
In addition to food, Lithuania’s exports to India include lasers and laser equipment. Many Indian universities have been using Lithuanian lasers for years, regularly updating their stock.
Talat-Kelpša says there is one more market that may look less obvious, but has a huge potential: education. In 2012, about 60 Indian students were studying in Lithuanian universities. Last year, the number was in excess of 600 and is expected to cross the 1,000 mark within years.
Another promising market is tourism. Talat-Kelpša says that Lithuanians have yet to discover the potential of Indian tourists, who have been coming to Central Europe in growing numbers. Within several years, the Baltic states might become an attraction point for Indian tourists looking to explore new destinations in Europe.
The World Bank estimates that in the coming two years India will overtake China as the fastest growing world economy.