Business insights from Theo's Adventure Capitalists: India

Bremont: luxury watches

Bremont seemed pretty well positioned to strike it lucky. Its £6,500 a pop watches seem perfect for all those Mumbai millionaires. Yes, an Indian entrepreneur nods, this is a great time to enter the market: two years ago rich Indians would have only wanted a Rolex, but now they're after something much rarer. But when the posh city-kid brothers Nick and Charles English start visiting actual Indian watch boutiques, they're affronted by a dazzling mecca of bling and gold - the style polar opposite to their heavy stainless-steel timepieces.

The furrows in their brows deepen rapidly as Theo nudges them to find out about taxes. Import duties are 58% and there are six other taxes they need to combat. They're not sure they could even turn a profit after that. And then there's the gaping difference in the sales process: when people walk into an Indian shop, be it newsagent or posh watch shop, they expect a discount of at least 35% - 40%. Which doesn't do a whole lot of good for one's margins.

"The whole business model is very, very different in India," the brothers realise. "Big brands are selling out there, but they're making very little per watch." They still plan to test the waters in a couple of shops, but it'll be a much scaled-down operation.

Key lesson? They would never have realised all this without coming to India.

Regenatec: eco-fuel and diesel engine conversion to use it

Regenatec falls altogether flat on its face throughout the programme. The trouble is, their green engines need to run off repurposed vegetable oil - which is used everywhere in the UK, but nowhere in India. They look into encouraging farmers to grow the crops needed, but Theo keeps pointing out there's no way they're going to be able to get the quantity needed to make this a viable business. Plus, there are no suitable mills for processing the oil even if they could source enough raw material - only rickety half-century old contraptions that would give a health and safety inspector a heart attack.

To make things just that bit worse, customers would have to pay about 20% more for Regenatec's eco fuel than for diesel, which the Indian government heavily subsidises. Oh, and they've only secured a contract to supply one bus if they do somehow manage to get things up and running.

Incredibly, the team still think their hopes for starting up in India have been 'completely vindicated'. Theo is flabbergasted. "Assumptions are what kill businesses," he warns. "You can't expect people to pay over the odds just for being green." He gives a little to-camera at the end which sums things up: "Not all good ideas are money-making ideas."

Marmite

It's fascinating to watch Marmite marketing marvel Cheryl at work. She's so endearingly excited at the opportunity to create an entirely new brand for India from scratch.

"Entry price is one of biggest challenges," she explains. "If you have to splash out to try it, then you don't like it, that's money wasted." And money, for many of her target audience, is of the essence.

Her first taste tests - Marmite sandwiches handed out on the street - seem to be going well, but Cheryl is sceptical. "One of biggest problems with consumer groups is they all say they like it when actually they think it's horrible". Finally people start saying they hate it, and a dog outright rejects it. The salty peculiarity of Britain's best-loved spread is a far cry from the cumin and cardamom of the Indian palette. Theo says ominously: "Cheryl's got to change the eating habits of a whole nation."

Then Cheryl's marketing-eagle mind latches onto something. Middle class mothers are the cooks for their families, and they feel judged by their standard of culinary adeptness. Plus, their kids are becoming ever more health-aware - and good diets don't exactly go hand in hand with the clarified-butter-soaked national cuisine.

She says she is starting to form a line in her head: 'All good cooks love Marmite - all healthy cooks love Marmite'. It's interesting watching how she assesses her target market and draws out the elements of her product that will most appeal to them.

Expanding the idea, Cheryl starts thinking about Marmite as a food flavouring rather than a spread. She holds taste tests with a prominent Indian chef knocking up various homely dishes using Marmite. The focus group love it! And they like the B vitamins and no fat side of things too, saying their kids will like that. Cheryl's found her hook.

But that's not her job done. The next challenge is actually getting her target customers to try the newly-branded flood-flavouring Marmite in the first place. She meets with a leading distributor, who says a barrage of marketing is the best way forward. Cheryl formulates a three-year plan of in-store demonstrations, recipe cards and securing a famous chef as the face of the brand. She proposes 'significantly over-investing' in the brand for the first three years, with basically all cash going on marketing. It'll cost around half a million to launch Marmite in India. And parent company Unilever are up for it!

"Cheryl realised she had to adapt her product - and she did," Theo smiles.

Which brings us to his three key lessons of the programme: get out to the country you want to do business in, listen to what you find out there, and adapt your product to suit your market when needed.

Theo's parting insight? "No amount of research can live up to actually experiencing the country. If you take it on board, and adapt, the world is your oyster."

Watch the full programme here.

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