PREFERRED SUPPLIER AGREEMENTS ARE LESS COMMON THAN IN NORTH AMERICA OR EUROPE


India is often portrayed as a land of contradictions; hardly surprising when a single country is home to one in six of this planet’s inhabitants. Deprivation remains a major challenge in the most populous nation after China, yet the proportion of citizens living in poverty halved to 28 per cent in the ten years to 2016. At the same time the middle class has swelled to, by some estimates, 400 million or more; bigger than the entire population of the US, which is third on the global list. It is this fast-growing demographic that is driving the


boom in business travel, both as travelling employees themselves and as the consumers whom multinational companies are piling into India to serve. “India has become more investor-friendly,” says Sundaram. “The last ten years were about big companies coming in but now we are seeing tier 2, 3 or even 4 companies setting up here as the middle classes demand a higher standard of services and products.” Despite Indian travel managers starting to be sought for multinational roles by Western companies, in their own country they attract only limited recognition. “Senior management does not have a significant focus on business travel,” says Sundaram. “They regard it largely as a fulfilment activity rather than a strategic issue. The travel manager is not regarded with a great deal of respect.”


buyingbusinesstravel.com POLICY PRACTICE


“In India, costs take precedence,” argues the head of travel for a large Indian tech company, who asked not to be identified. “It is completely different from Europe and North America, where a lot more freedom is given to travellers.” Sundaram agrees that policies are much more restrictive. “Companies often try to control and micro-manage travellers,” he says. “The focus of most Indian travel policies is to use the lowest possible prices. A company may use three or four TMCs. It will send a request to all of them and choose the lowest fare quoted.” There is one main exception to the principle of lowest price. “Unlike the US or Europe, policy is hierarchy-based,” says Geetha Arekal, head of mobility services supply chain management for Siemens in Mumbai. “Employees in different strata will have access to certain privileges.” These distinctions play out in making choices of hotel


room or airline cabins, where an employee is much more likely to fly in business class because they are a senior manager rather than, for example, because of the duration of the flight. Meanwhile, when it comes to sourcing, the philosophy


of buying the cheapest on the day means preferred supplier agreements are less common than in North America or Europe. “Vendor maturity is minimal,”


2020 JANUARY/FEBRUARY 93


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