India vs China: Unpacking Business, Mindset, and Success Secrets

This episode of the Shallu Nisha Podcast features Sanjay Kumar Sharma, a seasoned business consultant and angel investor with a remarkable track record of building over 680 private label brands. Sanjay shares his candid insights on why China often leads in business, how Indian entrepreneurs can expand globally, and the valuable lessons India can learn from China's education, tax, and technology systems. We explore everything from dropshipping and e-commerce to the distinct mindsets of Indian and Chinese business cultures. This conversation offers a masterclass for anyone looking to grow in the business world.

Key Takeaways

• Mindset is Paramount: Before diving into business, cultivating the right mindset is essential. This involves understanding how businesses develop and having a clear ecosystem around you.
• Focus on Creation, Not Just Repetition: While India excels in software, there's a tendency to repeat existing ideas rather than create new ones. China, though not exporting its technology, focuses on internal innovation.
• The Power of Ecosystems: China's business success is partly due to its well-developed business ecosystems where wealth is distributed more evenly, unlike the concentration seen in India.
• Customer-Centric Approach: Identifying your target customer is the first step. Understanding their needs and income level is more critical than just picking a product.
• Learn from China's Strengths: India can learn a great deal from China's approach to education, infrastructure, and business strategy, particularly in fostering a long-term vision and a strong national pride.

The Entrepreneurial Mindset: India vs. China

Sanjay highlights a significant difference in mindset between Indian and Chinese entrepreneurs. He notes that many Indians are talented but often lack focus and a clear vision, leading to distraction. In contrast, China emphasizes creation and a long-term vision. He points out that while India leads in IT exports, many Indian engineers seek opportunities abroad due to higher compensation, a stark contrast to China's strategy of keeping its technological advancements within its borders.

He stresses the importance of developing a business mindset before starting, especially given the prevalence of scams due to a lack of business literacy. Sanjay believes that focusing on building a brand and understanding the journey is more important than just having capital. He also observes that in India, there's a reluctance to put in the hard work required for business success, and that having too much money can sometimes lead to a plateau where the drive to innovate diminishes.

Building a Business from Scratch

For aspiring entrepreneurs with limited capital and knowledge, Sanjay advises a strategic approach. He suggests allocating a significant portion of the budget, around 60%, to marketing and PR. He emphasizes the need to develop skills in taking a business online, rather than immediately outsourcing. He also points out that third-party agencies might prioritize clients with larger budgets, making self-sufficiency in online marketing crucial.

Sanjay breaks down the process of building a brand by first identifying the target customer. He categorizes customers into six types: boys, girls, men, women, families, and pets. Understanding which customer segment your product serves is the foundational step. He illustrates this with an example of selling toys, where the actual consumer is the child, but the purchasing power lies with the parents. He also highlights the importance of understanding the market and competition before investing in a product.

Lessons from China's Education and Business Systems

Sanjay draws parallels between the Indian and Chinese education systems, noting that China prioritizes practical skills and a strong sense of national pride from an early age. He observes that Chinese schools often have better sports facilities and a more constructive approach to education, even with lower teacher salaries compared to India. This focus on foundational skills and national pride, he believes, contributes to China's overall success.

He also touches upon the 'Boycott China' sentiment, suggesting that India should focus on building its own manufacturing and assembly capabilities. He explains that many products labelled 'Make in India' often start with components imported from China. Sanjay advocates for developing assembly plants in India, which can lead to future production capabilities and reduce reliance on imports. He points out that China's dominance in manufacturing is partly due to its massive scale, allowing for lower production costs for components that India currently struggles to match.

The Rise of E-commerce and Dropshipping

Sanjay explains dropshipping as a business model where a seller doesn't keep products in stock but instead transfers customer orders and shipment details to a supplier, who then ships the product directly to the customer. He notes that even platforms like Amazon operate on a similar principle. While dropshipping is accessible, he warns about challenges in India, such as high return rates (RTO) due to a prevalence of Cash on Delivery (COD) orders and quality issues.

He suggests that for successful dropshipping, focusing on high-quality products with controlled sourcing and exclusivity with suppliers is key. He contrasts this with the US market, which has a more mature dropshipping ecosystem, with efficient logistics enabling quick delivery from China. He also observes that Pakistani entrepreneurs are currently more active and successful in dropshipping compared to Indians, attributing this to a more focused approach and a strong presence on platforms like Amazon.

China's Technological Prowess and Cultural Nuances

Sanjay is particularly impressed by China's self-developed technologies, citing TikTok as an example. He notes how China has commercialized platforms like TikTok for business, enabling entrepreneurs to sell products globally. He contrasts this with India, where social media time is often seen as a distraction rather than a business opportunity. He also mentions Russia and Iran as countries that have developed their own in-house technologies.

He discusses the language barrier in China, explaining that while general communication can be challenging for tourists, business professionals often have English proficiency. He also touches upon the cultural similarities between India and China, particularly in family values and respect for elders. Sanjay highlights the efficiency of China's payment systems, like WeChat, which allows for transactions via facial recognition, and their advanced high-speed rail network.

Key Learnings for Indian Entrepreneurs

Sanjay summarizes three core business learnings from China: Vision, Creation, and Repetition. He believes China's journey from inspiration to innovation, its long-term strategic planning, and its continuous improvement are lessons India should emulate. He emphasizes that India, with its young population, has a prime opportunity to build its own global presence. He also stresses the importance of design and presentation in making a product successful, as customers often interact with a product's visual representation before the physical item.

He shares his own journey, starting from a software background and transitioning into e-commerce, highlighting the immense hard work and dedication required. He advises young entrepreneurs to focus on developing skills, learning continuously, and maintaining patience and a clear vision to achieve success. He concludes by urging the youth to contribute to society and build a better future for the nation, rather than solely focusing on personal gain.