China's economy: US$10 tn. India's: US$2 tn. Can a robust product ecosystem bridge the gap?

What’s our best bet – services or products?

Product companies command 30%-50% profit margins while manufacturing companies barely can manage 3-5%. A good example is comparison between Apple and Foxconn, #1 and #10 in the list of top information technology companies with more than US$50 billion in revenues. The market capitalization of Apple Inc. is approximately US$750 billion on approximately US$180 billion revenues. At the same time, Foxconn is valued at US$32 billion on the revenues of US$130 billion.

All monetary values are in billions

Product companies can maintain higher margins because their focus is on innovation and develop new and differential products while manufacturing relies more on labor and low cost.

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In my opinion, while the margin of profit for service companies is more there has to be a balance. It is not possible for a new company to straight away enter into manufacturing stage. A local good local manufacturer would be much helpful and willing to entertain a small start-up. So we need a good manufacturers to go with great service companies. Considering the population and talent of our country we can easily handle both sides of trade and become globe leaders in both fields same to what China is doing.

say, we got both services and manufacturing covered. where are the actual products? who are developing that products that can take advantage of manufacturing and services?

I think you didn’t get my point. What I was trying to say is that products are coming up thick and fast from within india as well as from abroad. So we have to create a good support industry to go with this rise in product industry.

where are these products within India? can you name a few? we are flooded by products from China, Korea, US, Taiwan etc. we have been able to succeed with services industry so far. we just start to make some traction on manufacturing, even that the foreign brands are unwillingly doing it to save on import taxes etc. where are the apples, samsungs of India? where are the facebooks, twitters of India? where are the Oracles, SAPs of India? are we missing something?

I agree to the fact that we don’t have that world class global player in product industry. But you can’t deny the fact the indian companies like micromax lava etc are there who hold a considerable market share in india and are pushing for global recognition.

We need not just one but many world class players. Look at China, from Huawei to ZTE to Lenovo to Xiaomi to Spreadtrum. If Micromax is our bar for being world class product player, good lluck.

Yes, we cant take Micromax as our benchmark.its like squint eye is better than blind. Smartron is the one who has the ability to become a product company with out support provided they excel in weaker points of others like service,price,quality and innovation together. Its very early to comment.Lets wish all the best for now and do our support.

Thank you for the kind words. Samsung, Huawei etc., all started as scrappy companies before they become global brands.

Thanks for bringing up a topic like this first… I am pretty amazed by reading the replies from smartron team… finally someone is trying to change the face of India…
I don’t think Indian products are pushing towards a global recognition. Brands like micromax are succeeding because of focusing on delivering products to a wide range of people.
They provide a lot of options and make it available for everyone. Flooding the market is a nice strategy in India.
But to become a globally recognized brand, establish a brand name that strategy is not enough.
You know companies like Apple and Google are famous not just because they provide innovative products.
What really matters is providing a better experience to customers. By providing products and services that satisfies every user’s expectations. Creating a trend based on the products.
So I think to succeed in your mission, you have to stop chasing others. The specification race, providing content based services like subscribing apps for entertainment like hungama. It’s not going to last. Every user has unique needs. Particular promoted content can’t satisfy every user.
So focus on developing products and services that provide a better user experience.
Try to add some new technologies like more ways to interact with phone, VR based technologies.
And try researching from basic level like chip manufacturing processes, UI optimization, apps and services that are flexible. If you are providing a wallet based app, try to make it flexible like it can accept any kind transactions including transactions from other wallet services.
‘Innovation’ that is not useful for people is not going get any attention.
In short words, " if there are more competitors in the race, stop running behind them and start running in a different direction". You know what I mean… :+1::+1: