Product Selection in Indian Market

Key Factors of Product Selection for Export Import Business

Choosing the right product for your export-import business involves a strategic evaluation of various elements. These factors can significantly impact the viability and profitability of your trading operations. Let's delve into these considerations with a practical example to illustrate their importance.

1.⁠ ⁠Market Demand

Example: A business planning to export organic tea from India to Europe should research European consumer trends, which indicate a growing preference for organic and health-oriented products.

2.⁠ ⁠Regulatory Compliance

Example: The same organic tea must meet the European Union's stringent organic certification standards before it can be marketed as organic in Europe.

3.⁠ ⁠Competitive Analysis

Example : Analysing other organic tea brands in Europe helps understand what unique selling propositions (USPs) your product needs to stand out, such as unique flavors or packaging.

4.⁠ ⁠Profit Margins

Example : Calculate all costs involved in the export process including production , certification, shipping and tariffs to ensure the final pricing is competitive yet profitable in the European market.

5.⁠ ⁠Supply Chain Reliability

Example: Ensure that suppliers of organic tea leaves in India are reliable and can handle increased orders without compromising the quality, as any inconsistency can affect the brand's reputation.

6.⁠ ⁠Cultural Fit

Example: Packaging designs should resonate with European customers and include labelling in relevant languages, reflecting an understanding of local tastes and norms.

7.⁠ ⁠Economic Stability

Example: Consider the economic stability of target markets in Europe, as economic downturns can affect consumer spending, especially on premium products like organic tea.

8.⁠ ⁠Scalability

Example: Assess if the initial supply capacity can be scaled up to meet potential demand surges without significant delays, ensuring customer satisfaction and market growth.

9.⁠ ⁠Environmental and Ethical Considerations

Example: European consumers often favour companies with a strong ethical stance. Marketing the tea as not only organic but also sourced from fair-trade-certified farms can be a significant advantage.

10.⁠ ⁠Technological Trends

Example: Leverage technology to enhance product appeal, such as using QR codes on packaging that lead to a website detailing the tea's organic sourcing story and brewing tips.

A Practical Scenario

Scenario: You are considering whether to export ceramic pottery from India to the United States.

Market Demand: Research indicates a trend towards handmade and artisanal home decor items in the U.S.

Regulatory Compliance: Ensure the pottery is free from lead and other hazardous materials, complying with U.S. Import regulations for ceramics.

Competitive Analysis: Identify existing popular styles and price points of ceramic pottery in the U.S. market to find a niche— perhaps focusing on traditional Indian designs that can be marketed as unique.

Profit Margins: Calculate costs including materials, labor, shipping, and import duties to determine if the pricing remains competitive in the U.S. market.

Supply Chain Reliability: Secure relationships with skilled artisans and reliable shipping partners to handle logistics smoothly.

Cultural Fit: Design products that cater to U.S. preferences for color and design while maintaining an authentic Indian aesthetic.

Economic Stability: Monitor the U.S. economic climate, as changes may affect consumer spending on non-essential luxury items like decorative pottery.

Scalability: Plan for scalability by assessing if the supply chain can handle larger orders as the business grows.

Environmental and Ethical Considerations: Market the eco-friendliness of the materials and the support for artisan communities in India.

Technological Trends: Use an online platform to create virtual galleries where customers can view the pottery in 3D or augmented reality, enhancing the buying experience.

How to Choose Product for Export Business

This step-by-step guide provides a structured approach to selecting a product for export based on thorough research and strategic planning. Leveraging resources like Export.gov.in and other trade information portals will help you make informed decisions and establish a successful export business.

Step 1: Conduct Market Research

Objective: Identify potential products that have a demand in international markets.

Actions: Use resources like Commerce Gov to access market analysis reports and trade statistics. Attend international trade fairs and exhibitions to gauge current trends and popular products. Utilise online tools and databases to research which products from India have a growing demand overseas.

Step 2: Analyse Trade Barriers and Regulations

Objective: Understand the regulatory environment for exporting various products.

Actions: Check the Indian Trade Portal and other government resources for information on export duties, tariffs, and non-tariff barriers. Identify any certifications or standards required by target markets (e.g., CE marking for Europe, FDA approval for the USA).

Step 3: Evaluate Your Resources and Capabilities

Objective: Assess whether you can produce or procure the product sustainably and competitively.

Actions: Consider your access to raw materials, technology, and skilled labor.

Evaluate your capacity to meet quality and volume requirements.

Step 4: Perform a Competitive Analysis

Objective: Determine the level of competition in the target market.

Actions: Identify major competitors currently exporting similar products to your target markets.

Analyse their pricing, marketing strategies, and product differentiation.

Step 5: Calculate Costs and Profitability

Objective: Ensure the financial viability of exporting the chosen product.

Actions: Calculate production costs, including raw materials, labor, and overhead.

Factor in additional costs such as shipping, insurance, and customs duties.

Project potential sales prices and profit margins.

Step 6: Assess Market Entry Strategies

Objective: Plan how to enter and grow in the target market.

Actions: Decide whether to use direct or indirect exporting methods. Direct exporting involves selling directly to the buyer or through your own foreign distribution setup. Indirect exporting involves working through third-party distributors or agents.

Consider online platforms and digital marketing strategies to reach global customers.

Step 7: Prepare for Export Documentation and Compliance

⁠Objective: Ensure readiness for all export-related paperwork and legal compliance.

Actions: ⁠Familiarise yourself with the required export documentation such as commercial invoices, packing lists, certificates of origin, and bills of lading.

⁠Consult with a customs broker or a trade compliance expert to ensure all regulatory requirements are met.

Step 8: Create a Business Plan

Objective: Finalise your export strategy with a detailed business plan.

Actions: Outline your business objectives, market entry strategy, marketing plan, financial projections, and logistics.

⁠Include a risk assessment to prepare for potential challenges in the export process.

Step 9: Test the Market

⁠Objective: Validate your product and strategy in the target market.

Actions:Consider sending samples to potential buyers for feedback.

Start with small shipments to gauge market response before scaling up.

Step 10: Review and Adapt

Objective: Optimise your strategy based on market feedback.

Actions: Continuously monitor market trends and consumer feedback.

Adapt your product, pricing, or marketing strategies as necessary to maximise success.

How to Choose Product for Import Business

This post provides a comprehensive framework for selecting and importing products into India, ensuring that all critical aspects from market analysis to compliance, logistics, and marketing are covered. Following these steps can help you make informed decisions and establish a successful import business.

Step 1: Market Research

Objective: Identify potential products that have a demand in the Indian market.

Actions: Utilise trade portals, market analysis reports, and industry publications to understand consumer trends and demands in India. Explore online platforms such as IndiaMart and Tradelndia to see what products are being sought after and which have less saturation.

Attend international trade fairs and exhibitions that showcase products potentially not available in India but have a likely demand

Step 2: Assess Legal and Regulatory Requirements

⁠Objective: Understand all import regulations and compliance requirements in India.

Actions: Consult the Indian Customs and Central Excise website to know about duties, taxes, and tariffs applicable to different products. Check the Bureau of Indian Standards (BIS) for mandatory product certification requirements. Identify any restrictions or bans on particular imports.

Step 3: Evaluate Supplier Options

⁠Objective: Secure a reliable and efficient supplier.

Actions: Consistently meet your needs. Research and vet international suppliers to find ones with good reputations and the capacity to Consider using platforms like Alibaba or Global Sources to find manufacturers and read reviews. capabilities and negotiate terms.

Visit supplier facilities if possible, or attend trade shows where they exhibit, to assess their

Step 4: Analyze the Competition

Objective: Identify and evaluate the competition in the Indian market for the product.

Actions: Determine who the current importers and sellers of similar products are, their market share, and their pricing strategies. Understand how these competitors are positioning their products and any value-added services they offer.

Step 5: Cost and Pricing Strategy

Objective: Ensure the product is financially viable to import.

Actions: ⁠Calculate all costs involved in importing, including purchase price, shipping, insurance, customs duties, and compliance costs. Project your selling price based on the competition and value perception in the Indian market. Analyse expected profit margins to ensure they justify the investment and risk.

Step 6: Develop a Logistics Plan

Objective: Plan the transportation, storage, and distribution of your imported product.

Actions: ⁠Choose a logistics partner with experience in handling imports into India and good capabilities in customs clearance. ⁠Determine warehousing needs and distribution channels, whether direct to consumers, through wholesalers, or retailers.

Step 7: Create an Import and Sales Strategy

⁠Objective: Finalize how you will market and sell the imported products.

Actions: ⁠Develop marketing materials and campaigns tailored to the Indian market's preferences and cultural nuances.

Decide on sales channels-online, brick-and-mortar stores, or both.

Plan promotional strategies to generate interest and drive initial sales.

Step 8: Compliance and Documentation

Objective: Prepare for all necessary import documentation and compliance.

Actions: ⁠Ensure all required documents such as the Bill of Entry, commercial invoice, packing list, and Certificate of Origin are accurately prepared. ⁠Check for any additional certifications required for the Indian market before shipment.

Step 9: Market Testing

Objective: Validate the product in the Indian market with a test batch.

Actions: ⁠Import a small quantity initially to gauge consumer response and gather feedback.

Use this opportunity to refine your marketing and sales strategy based on actual market conditions.

Step 10: Review and Scale

Objective: Analyse the initial performance and plan for scaling up.

Actions: ⁠Evaluate sales data, customer feedback, and logistical performance. If the product meets expectations, consider increasing import volumes or adding related products to expand the portfolio.

Useful website for product research

Commerce Gov and TradeMap are crucial tools for any business involved in international trade, particularly for those based in India looking to expand abroad. Using these platforms effectively can help in making informed decisions and strategising entry into new markets.

Website	Description	Usage
Commerce Gov	This is the official portal managed by the Directorate General of Foreign Trade, Ministry of Commerce and Industry, Government of India. It provides comprehensive information on Indian foreign trade rules, export and import data, and policies.	Access detailed export-import statistics. Find information on export incentives and schemes. Learn about export documentation and procedures. Identify tariff rates and trade barriers.
TradeMap	Trade Map is an interactive online tool provided by the International Trade Centre (ITC). It offers detailed international trade statistics and market access information. trade barriers.	Analyse global import and export trends. Identify potential markets for products. Assess competitive markets and products. Explore tariff data and market requirements.