Cost-cutting in Asia: A snip at the price - United Kingdom

The recession gives parsimonious innovators a chance to go global

COBBLED together from carts, old cars and anything else to hand, the improvised vehicles used by Indian farmers are often known as jugaad. The term also has a much broader meaning—referring to an innovative, low-cost way of doing something—as goods and services are provided in India at a fraction of the cost of those in developed countries. Ingenuity is a necessity when resources are limited and customers have little money. In a global recession it also provides a way for companies in India and China to expand into foreign markets where consumers are seeking better value for money.

Asia’s cost-cutting innovators reject the notion that purchases of certain items only take off when consumers’ incomes reach specific levels, says Rama Bijapurkar, a consultant, speaking at a recent conference organised by the Centre for India and Global Business at the Judge Business School in Cambridge, England. Instead of selling items in small quantities to the rich while waiting for everyone else to pass the relevant “income threshold”, they re-engineer their products into cheaper ones to unlock mass markets right away. ...