•Sri Lanka's strong value
addition and marketing overcomes its high cost structure.
On the contrary, India's high-cost structures make it vulnerable
to emerging low-cost competitors
• As tea is strategically
important to established and emerging competing countries,
their Government/Associations play a key role in tea development
and promotion.
For the immediate strategy-making process, 6-7 markets have
been short-listed based on two broad criteria - market attractiveness
and India's ability to compete. The top six markets identified
were RUSSIA, UAE, IRAN and GERMANY for Orthodox exports
and POLAND and UK for CTC.
Given the constraints faced by the domestic tea sector,
Accenture has suggested that the solution themes lie in
improving India's product and service competitiveness and
address both demand creation and fulfillment issues.
CREATION OF INCREASED INTERNATIONAL
DEMAND:
Raising global demand levels for the Indian brew must be
made through diversification of market portfolio, promotional
and marketing exercises, value addition, creating niche
segments and providing good service. DEMAND
FULFILLMENT:
This, on the other hand, can be attained through correction
of Orthodox:CTC production mix, reduction of landed cost
and improvement in quality.
CREATION OF INCREASED INTERNATIONAL
DEMAND:
Diversification Of Market Portfolio
Only
four countries contribute to the demand for 75 per cent
of India's tea exports. Long-term tea trading partner, Russia,
accounts for more than half (52 per cent) of our country's
exports. This portrays the highly skewed pattern of India's
export market, leaving it susceptible to unforeseen instabilities
(that may go against our country's export interest) in only
one country. |
A
comparison with its competitors indicates that Kenya is
a clear leader in majority of the markets where it has a
presence and Sri Lanka is a leader or a close second in
12 out of the 19 markets. In fact, of the six top markets
identified, India is a leader in Russia, Germany and Poland.
It needs to consolidate its position in UAE, Iran and the
UK.
However, even this is likely to change in the future. With
the dismantling of the rupee-rouble agreement and Orthodox
preference and reduced imports of packet tea due to shift
of packaging to Russia, India is increasingly losing ground
in her long-held bastion. Russia is also in the core focus
of our neighbouring competitor Sri Lanka which is making
all out efforts to be the leading supplier in that country.
According to Accenture, India should concentrate on product
diversification in the US, Canada, Australia, France and
the Netherlands. Product diversification must necessarily
include focusing on untargeted product segments and exploring
the scope for value addition, creating niche segments for
Indian tea and providing quality service.
In markets such as UAE, Iran Saudi Arabia and Egypt, where
it already has a presence, our country must stress on consolidation
of its position through improvement of the quality of teas
supplied and build on levels of service.
Accenture has also suggested opportunistic entry in Pakistan,
Chile, Syria, Sudan and South Africa. This is expected to
prove vital for the Indian industry. As an entry strategy,
our country must target South Indian Orthodox Pekoe  teas,
at competitive prices and comparable quality to Sri Lanka,
tap 3-4 importers in Syria and traders in Dubai for entry
into that market and build trade loyalty and confidence
through sustained focus on relationships and service.
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