|Sanjay Kapoor left the world of banking|
to form Genesis Colors, a luxury apparel
retailer that carries the world's top brands.
Now in 20 major cities in India, the
company's annual growth is 40-50 percent.
"India is a land of great diversity, hence great opportunity," says Sanjay Kapoor ’91S (MBA), a leading fashion industry magnate. Despite the recent slowdown of the Indian economy, Kapoor says, "there are many avenues for entrepreneurship available."
Nandini Sankar ’97, whose dual economics and computer degrees paved the way to a top job at a major hedge fund administrator, agrees. India offers "a fertile environment for new business ideas," she says.
The world’s second largest country with a population of more than 1.2 billion, India has grown to become a trillion-dollar economy. The coming of age of India’s baby boom is expected to create huge growth in consumer spending. A recent report by the Boston Consulting Group, "The Tiger Roars: Capturing India’s Explosive Growth in Consumer Spending," predicts that runaway growth in the middle and upper classes will drive annual consumer spending in India to $3.6 trillion by 2020, quadruple its 2012 level. India’s average household income is predicted to triple in the same period.
The Simon School is "well positioned to capitalize on the growing importance and influence of the Indian market," says Simon School Dean Mark Zupan. "We have well-established channels through which to attract high-achieving students, and an alumni network that is represented in all facets of the Indian economy. In the coming years, it will be important for our school to remain highly visible to prospective students, hiring managers and stakeholders in India."
"The growth opportunities for companies are in emerging markets, so MBA interest is starting to follow," says Delores Conway, Associate Dean for Master’s Programs, who oversees the Simon School’s Career Management Center and works with multinational corporations to place Simon graduates. Indeed, last year’s QS TopMBA.com Jobs & Salary Trends Report found that hiring in the previous year had increased 16 percent in India and was expected to grow another 29 percent in 2012-2013—compared to just 2 percent growth predicted for the United States.
In the past, US multinationals might have sent American executives overseas, complete with American salaries, housing allowances, and travel expenses. But that model is becoming too expensive, Conway says. "What they really want is to have local candidates who are trained in the United States, can speak English well, and are trained in US schools."
The hiring program is only in its second year, but is already seeing robust interest from multinationals, Conway says. "Where are these companies growing their business? In the emerging markets," she says. "They come to us because they know how strong the Simon training is and that they’re getting top candidates."
The economic picture in India is not all rosy, however, fter growing rapidly between 2006 and 2011, even as much of the rest of the world fell into recession, India’s GDP growth slowed in recent years to around 5 percent, a result of global, domestic, and policy challenges. Many economists believe that the worst is over, though, and that a modest recovery is underway. Citi India’s CEO, Pramit Jhaveri ’87S (MBA), is predicting a "shallow recovery" and 5.7 percent GDP growth in 2014, as is the IMF. Government forecasts call for growth in the 6.1 to 6.7 percent range.
India’s government has responded to the economic slowdown by easing restrictions on foreign investment in its retail, civil aviation, and broadcasting sectors. While the initial exuberance of the investment climate has dimmed, targeted investments still hold "significant potential," Sankar says. "India retains the energy and enthusiasm that fueled the country’s growth," he notes.
India is often referred to as the next China, a comparison Kapoor embraces.
"Absolutely!" he says. "The only thing that sets us behind China is infrastructure. In another 10 to 15 years we will definitely have bridged that gap."
Some 166 Simon School alumni—and 355 University of Rochester graduates in all— live and work in India. Here are two of their stories:
Sanjay Kapoor: Fashion Retail Expert
Like many Simon graduates, the 44-year-old Kapoor went to work for Citibank after earning his MBA from Simon, first in Singapore and then in India. Kapoor soon left the banking world to branch out on his own, joining forces with Citi colleague Jyoti Narula to start a designer-wear retail business. The company, Genesis Colors Pvt. Ltd., got its start exporting neckties and in 2001 acquired the popular Indian fashion brand Satya Paul.
Today, Genesis Colors is India’s top luxury retailer, marketing and distributing international luxury brands, including Burberry, Canali, Jimmy Choo, Bottega Veneta, and Paul Smith. The company has expanded rapidly, opening boutiques outside Delhi and Mumbai in metropolitan areas such as Chennai and Hyderabad. It has a presence in 20 major cities in India, including 130 stand-alone brand outlets and 65 shop-in-shops. The company’s annual growth is in the neighborhood of 40 to 50 percent, Kapoor has said, and an IPO is planned in the near future.
Even as growth in much of India’s economy has slowed, the luxury market has continued to grow at 20 percent annually, fueled by India’s tremendous growth in disposable income and standard of living. A study by Yes Bank-Assocham predicted the Indian luxury market would reach $14.73 billion by 2015. "People are getting used to consumption, and people want to look good," Kapoor said in an interview with India’s business newspaper Mint.
The frequent subject of admiring profiles and photo spreads in the Indian press, Kapoor is credited with corporatizing India’s fashion market, and with making Genesis Colors the first Indian fashion company to obtain private equity funding. L Capital Asia—a private equity fund of Louis Vuitton Moet Hennessy Group—has a large stake in Genesis Colors’ subsidiary Genesis Luxury Fashion.
Kapoor credits his Simon education with honing his entrepreneurial skills and teaching him "how to think in a global environment." His time with Citibank, he says, was "an invaluable asset" in learning how to run his own business, and especially in understanding the nuances of private equity funding. "My experience with Citibank gave me an insight into finances—profitability and cash flows—while responding to market needs," he notes
While there are many opportunities for entrepreneurs in India, Kapoor says retail and supply-chain management offer particularly good prospects for growth. "For anyone wanting to start their own business, the retail environment is very fertile," he says. "There are so many domestic and international brands in the market today and many more lined up to enter. The consumption culture is at its peak. India is still one of the fastest growing economies in the world, and a hub for future retail second only to China."
Kapoor notes that the government is focused on improving the business environment, and in particular on encouraging foreign direct investment. Still needed, he says, are improved import policies and lower duties. But despite challenges such as inadequate infrastructure and burdensome regulations, Kapoor believes the investment climate will continue to improve. "The good news is that the consumer is making a lot of choices that are leading policy change," he says.
Nandini Sankar: Technology Whiz
Sankar, 38, graduated from the University of Rochester in 1997 with a BS in computer science and a BA in economics. Today, she is Managing Director, COO and President for India of SS&C GlobeOp, a leading fund administrator that services the hedge fund and asset management industry.
Sankar started out as a computer science major, but an economics course with professor Steven Landsburg hooked her on that subject as well. After graduating, she interned with Coopers & Lybrand, then went to work as a technology strategist for the Long Term Capital Management hedge fund. "LTCM allowed me to use both skill sets in tandem," Sankar says. "At that time, it was one of the few hedge funds that relied on very sophisticated risk models to determine their trading strategies."
After the demise of LTCM in 2000, a group of principals, including Sankar, established GlobeOp Financial Services, a firm specializing in technology for hedge fund administration. GlobeOp was acquired by SS&C Technologies Holdings Inc. in 2012.
Sankar was GlobeOp’s Director of Technology, based out of New York, until she moved to India in 2003 to set up the company’s Mumbai offices. Operating out of India allows GlobeOp to give its global clients 24-hour coverage, Sankar says.
Sankar grew up in Chennai, the southeastern coastal city formerly known as Madras. She has been impressed by Mumbai, she says. "I was enthused by how quickly the city accepts new immigrants, and by the fact that everyone—from a housemaid to the CFO of an organization—approached their work with a high level of professionalism and a can-do attitude."
Sankar says her career path has been a series of "happy coincidences," including her return to India. "When you make the move to India you can choose to focus on the negatives—and there are a lot of them—or search for the nuggets of gold," she says. "Once you do that, you will be blown away by the tenacity of Indian people and their will to succeed."
Sankar sees exciting opportunities in India today across all industries. Chief among them, she says, is "getting firms to compete on ability and not on cost." The IT firms that spearheaded the wave of outsourcing and off shoring business models in India were focused solely on cheaper labor, she says. "The next few years will tap into the latent intellectual talent in India. It will be exciting to compete on an equal footing with our Western counterparts."
Although the initial exuberance of India’s investment climate has muted, targeted investments still hold significant potential, she says. "I believe that the next decade will see strides made by companies that have learned from their initial mistakes, corrected their direction, and placed a higher value on the integrity of processes and technology."
When American and European clients visit SS&C GlobeOp’s India offices, Sankar says, she waits for the "Aha!" moment when they meet the teams that service their account.
"Within 30 minutes they start recognizing the depth of knowledge, attention to detail, and expertise of the staff in India," she says, adding that clients routinely comment on the teams’ pride in their work, enthusiasm, and hunger for knowledge. "These are not teams that routinely follow a process and a checklist. They have studied the process deeply, accounted for areas of risk, added compensating controls, and worked with technology teams to develop enhancements in applications that will enhance productivity."
Once Americans recognize that India provides an opportunity not just to lower costs, but also to improve existing processes, Sankar says, "they will have leveraged India’s intellectual potential."
Asked about the biggest challenges to doing business in India, Sankar lists government regulations and laws that are "subject to various interpretations." Partnering with a professional accounting firm and law firm is key, she says. In addition, companies need to be aware that "India is a land where relationships matter."" In recognition of that, SS&C GlobeOp holds twice-yearly open houses for families—parents as well as children and spouses. Employees staff booths with information about each department, and families walk around learning about the company and meeting managers and teams. Sankar says the open houses were a result of the company realizing that career decisions were rarely taken by individual employees alone. "Building this connection with families was important," she says.
Sankar credits the University of Rochester with exposing her to a diverse, multicultural student body. "The ability to interact closely with students from various parts of the world was eye-opening," she says. "It allowed me to build social skill sets that continue to help me in my current role." The University also taught her to "take pride in the quality and integrity of my work, and not just the results," she notes. "The School taught me that if you focus on building the best process, the success of the outcome is guaranteed."
Kapoor echoes the sentiment of building successes piece by piece. "India is a long-term business plan," he says. "India is one of the most promising consumer environments in the world, but you cannot enter expecting to make quick returns, which takes time. You have to invest in the future, which is looking very bright."
By Hilary Appelman