Preface

"Haste makes waste; only by being down-to-earth can one go far." — This phrase encapsulates the story of Wistron's failure in the Indian market. Initially, Wistron believed that high salaries and benefits would secure its market share, but Tata Group acquired its factory, which had an investment of 9 billion, for a mere 125 million dollars, an event that is nothing short of lamentable.

Behind the allure of India's "demographic dividend" lies the complex challenges of inadequate infrastructure, uneven workforce quality, and cultural differences. Wistron's lesson not only serves as a warning for companies venturing into emerging markets but also prompts reflection on how businesses can avoid risks in global expansion.

Advertisement

I. Wistron's Indian Adventure

Wistron's "investment adventure" in India initially seemed like a dream come true. With high salaries and benefits, Wistron quickly attracted a large local workforce and captured 75% of the market share.

At first glance, it appeared to be a perfect example of "the first step into the Indian market." However, reality did not follow the script, and what followed was a sudden "great riot" that brought Wistron crashing down from the clouds.

In December 2020, Wistron's factory was suddenly hit by a massive strike and riot. This riot was not just an outburst of employee emotions but had deeper causes. The cost of living soared, and the working conditions did not keep up, making employees feel cheated. Working overtime and still not earning enough to cover rent and food expenses was unbearable.

As a result, employees not only went on a collective strike but also engaged in some "destructive activities": factory facilities were smashed, and there were even violent conflicts, leaving the scene in chaos. This riot directly caused Wistron hundreds of millions of rupees in losses, leaving them truly stunned.

What's more heartbreaking is that this riot was just the tip of the iceberg. Wistron had been struggling in India for a full 15 years, but when they tallied their accounts, they found that they had lost so much that they were left with nothing. In an environment of high costs and low efficiency, with funds not covering expenses and operating costs rising year after year, Wistron's "Indian dream" instantly turned into a nightmare.Wistron's experience teaches us a lesson: in the expansion of globalization, the potential of the market and the pitfalls are always inseparable. On the surface, India's "demographic dividend" is indeed tempting, but whether this "big gold mine" can be mined is not only a test of the company's capital and courage, but also its strategic vision and long-term planning. So, how should the future global expansion go? Companies need to avoid stepping into the "Wistron-style" big pit and must start from multiple aspects.

When choosing a market, companies cannot only focus on the population size. Yes, India has billions of people, but not all markets are like China, which is a "infrastructure maniac" with a complete industrial chain and skilled workers. When expanding globally, companies need to conduct in-depth research on the market's infrastructure, industrial chain support, and labor quality.

No matter how great the market potential of a country is, without complete supporting facilities, the high return on investment is just an illusion. Companies that are dragged down by infrastructure can only "lose both the wife and the soldiers" in the end, like Wistron, which can only watch helplessly as their investment in India turns into a bubble.

Secondly, risk management must be in place. The potential of emerging markets is indeed tempting, but the hidden risks are also astonishing. On the road to global expansion, companies must learn to be prepared for a rainy day and establish effective risk response mechanisms. Whether it is policy fluctuations, labor disputes, or sudden strikes and riots, they can all cause unbearable losses to companies.

Wistron, because it underestimated the complexity of the Indian market, eventually fell into multiple dilemmas, unable to reflow funds, and operating costs soared. Therefore, companies must set up multiple protection nets when deploying to prevent those "black swan" events.

Finally, sustainable development is the key to future expansion. The "quick in and out" model in the short term may be able to quickly occupy the market, but in the long run, if you want to stand firm in a market, the construction of infrastructure and the improvement of the industrial chain are essential.

Chinese companies, in the process of global expansion, rely on a complete supply chain and long-term infrastructure investment to go steadily and far. Wistron's failure just reflects that if the importance of infrastructure construction is ignored, even with more demographic dividends, companies can only struggle in the mud.

Conclusion

Wistron's failure in India is not only an individual case but also a warning to all companies expanding globally. Through this lesson, we have seen the importance of infrastructure, cultural adaptation, and the industrial chain. Companies must be more cautious when evaluating emerging markets in the future, and only by being down-to-earth can they go further.