Let's take a serious look that the choices betwen India and China in today's global marketplace.

China
China today is still not a free democratic society and the government remains fundamentally a Communist regime. Economic reforms have been viewed as brilliant and in fact China has done an excellent job of taking its country out of the mid-20th century directly into the 21st, particularly after it took control of Hong Kong from the British in 1997.

But despite China's significant economic reforms, social changes and democracy are not moving quite in pace. The government still cracks down on violations of law in ways western countries find unacceptable. Though such social change will come, eventually, the Chinese people still, to some extent feel oppressed.

With its huge market, China has outpaced every other economy in the world in recent years. But breaking into this economy with a successful business model the Chinese people would accept is not easy.

For example, the public there have established methods of doing things that often date back thousands of years. Trying to sell them something that contravenes an established method or practice or tradition is almost impossible.

Most imported business success is almost exclusively in the major cities such as Shanghai and Beijing, but still have not filtered to the outer regions and smaller cities. While this may come, it too is slow in progress.

The recent Shanghai market correction, which sent a small tidal wave around the world markets has settled for the moment, but it showed that the economic and business controls there are not yet fully in place or understood as they are in places like London, Frankfurt or New York.

Then there's the way the Chinese do business, particularly with outsiders. China is still, to many, a closed society. The Chinese themselves still view outsiders with skepticism as they have since the days of Marco Polo. Though they are a most gracious and warm people, in business, their practices of conducting a business relationship are extremely foreign to outsiders. For example, it is customary to set aside a portion of a business deal to pay officials to get the deal done and to pay those in the deal an under-the-table sum to make a deal work. In the US, we consider this bribery and would prosecute, but in China, it's standard business practice.

This can be an extremely expensive business proposition. One major fast food chain, attempting to open in Beijing had to pay under the table, but also had to provide a contract to manufacture its furniture and other fittings in China just to obtain the right to run its restaurant there. In total, it wasn't a bad deal for the chain, but a considerably expensive one.

The Chinese are both industrious and capable of producing (or reproducing), just about anything. Today, almost every single movie, album, or pharmaceutical is illegally copied and distributed from China, without consideration of any kind to patent, trademark or copyright holders. From fake Viagra to sneakers, music videos and films to washing machines, the Chinese seem to have no problems copying your products and under-selling you until you're driven out of the marketplace.

A former client, for example, manufactured picture frames and produced prints for sale to the lodging industry. In his mid-west town, the Governor of his state visited with a trade delegation from China in what was hailed as a prestigious international trip, sponsored by the State Dept. In fact, it was government sponsored industrial espionage. The Chinese officials took catalogs, samples and gifts home, but in six months, this company's entire catalog had been reproduced at dirt-cheap prices in China. Eventually, the owner of the US based company was forced to sell his company - to a Chinese concern or face bankruptcy as his sales plummeted.

An official of the US FDA stated to us last year that the FDA has a new liaison discussion going on with their counterparts in China dealing with the ever growing problem of fake pharmaceuticals being produced there. This was sparked by several deaths in the US from people who bought discounted Viagra that was in fact, rat poison.

Investing huge capital in China today may be the beginning of a very slippery slope downhill for your business. Extreme care should be undertaken to research everything and limit access to your business by Chinese officials until you are absolutely ready. It is also advisable to hire a Chinese-American attorney someplace like Los Angeles, San Francisco or New York to ensure you're getting the right deal and not being taken advantage of from the start.

You simply must perform extreme due diligence in the early stages before you commit to anything there and be wary, your products or services could easily be copied without your knowledge.

India
India is a democratic government with far more Western views of business than China. More than a century of British rule have indoctrinated Indian business people to European and American business practices and methods.

Society there is free and unoppressed. India has excellent schools and infrastructure to support its various regions, each with their own distinct ways.

However, Indian business people also have their very peculiar ways we Westerners are not accustomed in regular business. For example, it is not uncommon for an Indian business owner in dealing with a Western company to dictate to that company how they should do business with him, completely disregarding the Western company's established practices or methods. If it doesn't work for him, the Indian business man will not be satisfied and will, without exaggeration, push your company until you either give in or leave the discussion under less than polite circumstances.

The do not like hearing "no" in a business transaction. This makes doing business there very difficult for many Western companies.

On the otherhand, there is a high percentage of people who speak English, and a high number of highly qualified software developers, with excellent back-office operations ready to work with your company.

That being said, having a back office is not the same as your front office, but we've found that Indian business people cannot distinguish the two. In our own case, we have several back-office operations there and list one of them, as such on this website. Despite the clear statement of that office's role in our company, we're often requested to have an exectutive from those offices meet with Indian businesses that simply don't understand that our back office does not make contract decisions for our company.

Bina, formerly director of one of our operations in Bangalore said in a recent discussion, "many Indians are very difficult to deal with. You have to know them well and what regions they come from to understand how to work with them. Each region has its own typical ways. Though its unfair to generalize a group of people from a specific area, one must comprehend that people in an area grow up learning how to do things in their local manner. Outsiders either have to adapt to them or just not do business there."

She added... "A Western business should hire a local consultant to guide them through the different ways Indians have of doing business." Though Epicurus did that in our early growth phase into Mumbia, Bangalore and Chennai, among other locations, we've found grave difficulties in dealing with local busienss people.

Americans also have some level of difficulties in dealing with Indian back-office operations too. One feels a certain detachment from your local circumstances when the person you're speaking with on the phone is half a world away. It often annoys US customers to have to speak with someone so far apart from them. Though many Indians speak fluent English, many Americans cannot understand the Indian accents, causing a communication disconnect between your customer and your back-office.

Though India is an excellent location for back-office operations, and quite cost effective - for the moment - you must consider these factors in deciding what kind of back-office you'll run there.

We at Epicurus are hardly xenophobic, after all, we operate in 38 countries. But we strongly believe that it's important for business leaders in the US to look to keeping operations as close to home as possible and be considerate of your customer base before your cost savings. No savings today is worth losing a percentage of your customer base.

Overall, we believe you must make your own decisions, and Epicurus is here to help you do that. However, it's crucial to understand that this is one of the biggest decisions you'll make for your company's future. It must be made taking into consideration hundreds of issues and you should be taking serious advice on this from a professional consultant.

Please contact us to discuss your international expansion plans today.