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> Outside China, India is one of the largest single market Having a large population (without purchasing power) isn't enough to call a region one of the larges

> Outside China, India is one of the largest single market Having a large population (without purchasing power) isn't enough to call a region one of the largest single market in the world. China and India have growing middle class but 95% of their population still have no savings, these people only spend on food and household. The largest single market in the world is the European Economic Area, the second largest is the United States (+ Canada and Mexico), all other markets are incomparable from these two developed markets because the difference is so large.

naruvimama 6y ago
You are very right. It is true from the value point of view and for now. There are two other actions at play here 1. When you are buying a new car or a house in the developed world it is usually replacing an existing car or house, perhaps with a marginal increase in efficiency. In the case of India you are adding an asset which adds close to 100% value. This also applies to roads, bridges and factories. 2. The number of units sold has a significant value to the company, that is part of the success behind China. That adds economies of scale as well as a ground to innovate for the rest of the world, which is incidentally mostly price sensitive. An iPhone costs more than Rs. 100K, typical budget Android phones are around 5K that is 20x. The investments that foxconn is making is pretty small, includes equipment moved from China to diversify.
learc83 6y ago
Calling the European Economic Area a single market is also a stretch. Sure from a regulatory point of view it is, but practically it’s not. Cultural and language differences between countries are often a larger barrier to your product than tariffs and legal hurdles.
manquer 6y ago
> China and India have growing middle class but 95% of their population still have no savings You have A source on this ? What OP meant is that these are largest growing markets today and probably in the near future . people are generally interested where the growth is coming from more than where the existing spends are, especially if you are a more traditional business and not planning on disruption of a current market as a business model.

naruvimama 6y ago

You are very right. It is true from the value point of view and for now. There are two other actions at play here 1. When you are buying a new car or a house in the developed world it is usually replacing an existing car or house, perhaps with a marginal increase in efficiency. In the case of India you are adding an asset which adds close to 100% value. This also applies to roads, bridges and factories. 2. The number of units sold has a significant value to the company, that is part of the success behind China. That adds economies of scale as well as a ground to innovate for the rest of the world, which is incidentally mostly price sensitive. An iPhone costs more than Rs. 100K, typical budget Android phones are around 5K that is 20x. The investments that foxconn is making is pretty small, includes equipment moved from China to diversify.

learc83 6y ago

Calling the European Economic Area a single market is also a stretch. Sure from a regulatory point of view it is, but practically it’s not. Cultural and language differences between countries are often a larger barrier to your product than tariffs and legal hurdles.

manquer 6y ago

> China and India have growing middle class but 95% of their population still have no savings You have A source on this ? What OP meant is that these are largest growing markets today and probably in the near future . people are generally interested where the growth is coming from more than where the existing spends are, especially if you are a more traditional business and not planning on disruption of a current market as a business model.