Mircom Shows How to Compete with India’s Low-Cost Products

Mircom Shows How to Compete with India’s Low-Cost Products

India is a market known for low price-points and intense competition among local and international companies, which can sometimes reduce quality and compromise safety standards. But for the Mircom Group of Companies, the key to finding success is offering a quality product with international approvals and local support.

Mircom designs, develops and manufactures intelligent building and life safety solutions (fire, communications, security, automation and smart technologies) that adhere to strict international codes. The private family-owned company based in Vaughan, Ontario, started in 1991 and began exporting in 2004. They quickly broke into India as the country opened its burgeoning markets to foreign companies and embraced North American standards in the critical field.

Mircom_headshot“It’s a huge opportunity,” says Shahul Hameed, vice-president of strategic development in the Middle East, North Africa and India region for Mircom. The rise of India’s construction activity and industrial sector as well as the growth of IT-enabled services “made the country a hotbed of activity” for the fire and gas detection industry, he notes.

Mircom has had healthy international growth, stemming from R&D and new product development, strategic acquisitions, increasing brand awareness and geographic expansion. It has 600 staff worldwide and business in some 100 countries, representing more than one quarter of its revenues.

With 12 employees based in its regional sales and service office in Bangalore, Mircom is set up as a foreign direct subsidiary in India, which works well for a company primarily involved in sales, distribution, business development and marketing there, Hameed says.

About 10 per cent of its foreign sales today are in India and “we are just scratching the surface, there’s still so much to do,” he comments, noting that the country “comes with its own challenges – it’s not an easy market to penetrate.”

The current slump in the world economy has slowed demand in India, he says, so projects are deferred or delayed, with governments and private companies looking for long credit periods.

“To add to the woes, many small fly-by-night-operators have flooded the market, and are operating on thin margins and using inferior products to cut costs,” he says. Larger foreign companies like Mircom are also hampered by currency exchange volatility, statutory compliances on tariffs and taxation as well as general market dynamics.

“The fire market in India is specification-driven, and we had to do a lot of homework to convince the engineers to use our products,” he explains, adding that while pricing is a challenge, “the Indian market needs and demands good products which carry internationally acclaimed codes and standards.”

Hameed, who comes from Chennai, India, and worked for years in the fire-safety field in the country before immigrating to Canada, says the key to operating in India is “to hire local resources with the skill-set and knowledge to operate in these markets.”

Export Development Canada (EDC) “clearly understands the issues” in India and has offered valuable support to Mircom there, he says. “They have the reach. They are available for us if we need to tap into their contact base.”

With the election of the new Indian government under the leadership of Prime Minister Narendra Modi, “we expect growth to accelerate in the next few years,” Hameed adds. “I think it will take some time, but the mood is upbeat, investors are positive. They want to participate in the growth story of India.”

Words of advice from Shahul Hameed, Mircon’s vice-president of strategic development in the Middle East, North Africa and India region

Hire knowledgeable, local people: “It’s important to have some exposure or experience in these markets. That will really help the organizations to penetrate professionally and carefully.”

Get your technical specs accepted: “Engineers need to follow the relevant codes and standards whenever they design a system, but you also need to demonstrate that your product has got the right amount of references internationally or locally.”

Categories Infrastructure & Construction

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