Genexis sees big opportunities in the Indian IT industry
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India is in lockdown, but from home, the Indian IT industry is still keeping the back offices of large and small international companies running. And that is an interesting development for Genexis, the European market leader in fiber optic modems. The Brabant company is not only in poll position in the EU, but also in India, sister company GX Group leads the fiber optic market. “Now that India has gone into lockdown, you can see the country’s rapid adaptability. One thing is certain: the corona lockdowns will elevate broadband in India to a priority,” says Genexis CEO, Gerlas van den Hoven.
Left: Gerlas van den Hoven, middle: Paritosh Prajapati
Genexis India employees have also been working from home since the lockdown was announced. According to Gerlas, this transition has gone more smoothly than expected: “Most of us have a broadband connection at home with no more than a few Mbps, and yet our software engineers still manage to deliver good work.” Research shows that Indian companies have significantly scaled up their home-working options in a short period of time. The number of companies offering remote work options since the lockdown has increased from 20% to 96%. “That gives our industry, especially in India, a boost.”
Find a sales team, set up a Private Limited and go!
Genexis India, now GX Group, has been working in the Southeast Asian country for 7 years now. “Unlike most companies, we did not go to India with the intention of outsourcing or setting up an R&D team,” says Gerlas. “It all started with one of our salespeople, Paritosh Prajapati, who worked for our branch in Sweden. He saw a lot happening in the field of fiber optics in India and approached us to see if he could do some market research there. ‘Why not?’, we thought and sent him there with a business developer.”
From that moment on, things moved quickly. “He immediately saw that there were opportunities for us on the Indian market, but Paritosh had no idea how to start a company there, just like we did.” According to Gerlas, it is essential to have someone on the ground who you trust and who understands the culture and the language. “Not only did Paritosh have a good sales team together in no time thanks to his good contacts, he was also able to find the right people to arrange things that he himself did not understand, such as a PAN number, taxes and permits.” The leap was taken, Genexis set up a private limited, rented an office and got started.
‘For a well-functioning R&D team in India, you need a local manager who understands Europe and India’
The first four years, Genexis was barely able to keep its head above water in India. Small projects were won, but they did not yield enough. “Instead of closing down and taking our losses, we adjusted our expectations and chose to continue. India is not a country where you sit for the short term, so we decided to invest heavily in two things.”
First of all, an R&D team was set up for the development of software for the European market. Genexis had been struggling with a shortage of good engineers for some time and could not fill the vacancies in Europe. “In India, the supply of software people was much larger and also had a much lower price tag.” With Paritosh at the head of the Indian branch, they also had a very good ‘translation bridge’ between Europe and India. “Because Paritosh is a Swede, he understands exactly what quality we want in Europe, but because of his Indian background he can also translate that perfectly to the Indian way of working. Someone like that is essential if you want to succeed as a European company in a country like India.
‘Want to win a government contract? Show your face.’
Investments were also made in sales in India. In order to find out why Genexis products were not popular, Gerlas and his team took a close look at the Indian market. “We went to several places to see how fibre optic cables are installed in India and that was an eye-opener. For example, it is very normal to tie fibre optic cables to poles or pull them over trees. I also went to someone’s house and then you see the fibre optic cable going through the window into the living room, where it lies in a bunch in the corner with the modem on top. It was immediately clear that our fancy European modems were a total mismatch with the needs of Indian consumers and that we had to offer a total solution.”
A simple modem for the consumer and associated central equipment for internet providers turned out to be the gap in the Indian market. Genexis is now involved in local projects on a large scale. “In the wealthy neighbourhoods, fibre optic cable is being rolled out en masse. We then approach the local cable club and they are often very interested in our total solutions, because they fit in well with the wishes of the Indian user. Our product may be a tad more expensive than average, but it is the simplest in terms of maintenance and installation and that makes us an interesting party.” Gerlas’ advice for entrepreneurs who want to compete for government contracts is to be patient. “In India, you have to be present, you have to show your face. We have been here for seven years and have worked on so many projects that we are now an established name. That creates trust.”
Payment morality in India
It is not all hosanna for Genexis in India. “We have now experienced more than once that an Indian customer places a large order, but does not pay the invoices after we have delivered. Then you also notice how useful it is to have someone in your team who knows both cultures. For example, you should not bang your fist on the table three days after the payment term has expired. But you also can’t allow such a customer to say: ‘come and pick up those things again.’ You have to dare to stand your ground and ultimately take the step to court if necessary.”
According to the CEO of Genexis, you don’t take that legal step to get your money, but to show that you dare to take a case. “The risk for a Dutch company is small, an Indian lawyer is relatively cheap and you lose a maximum of around 10,000 to 15,000 if the law is not decided in your favor.” But the most important thing, according to Gerlas, is that once you have taken the step to court, it is often no longer necessary to take such a drastic step in a subsequent dispute. “We have proven to be a serious European company and that has status. The Indian companies we work with often also have a reputation in their sector and would rather not risk it, so they choose eggs for their money.”
‘Building a bond with your staff is a hundred times more important in India than anywhere else’
Genexis India has been split off from the Dutch part for a year now and will continue under the name GX Group with Paritosh as CEO. The ambitions for the future are high. “We are now in poll position in this market and we expect that India will roll out broadband at a rapid pace in the next five years, in addition to the mobile network.” That prediction now seems to be accelerating due to the coronavirus, but GX Group has also had to endure some minor setbacks due to the outbreak. For example, a major event that GX Group was to organize for the first time this year for their sector could not take place in February.
“It is of course a great shame, because we wanted to use this event to launch the new name GX Group and to re-introduce ourselves to the market. But more importantly for us is that we were able to celebrate our annual staff party in time. India is a real family country, so building a bond with your staff is a hundred times more important than anywhere else. The fact that we were all able to get on the dance floor again before the country went into lockdown is a nice memory in these crazy times.”
