Chicago based commerce marketplace company Groupon, Inc. announced plans to open a research and development center in Chennai, India, which will make it the fifth R&D globally developing e-commerce and m-commerce applications for Groupon’s Asia-Pacific markets. The center is to concentrate on formulating customer service tools, supply chain management tools, and make mobile commerce applications for the Asia Pacific region.

Analysis of the most recent Consumer Price Index data released by Reserve Bank of India shows that Bangalore has the highest average cost of living in India, followed by Mumbai, then Chennai, Kolkata, and Delhi.

This is a chart from The Times of India, which indicates the CPI scores of the six different cities mentioned.

There are a variety of factors that contribute to the differential living costs of the cities, including aspirations of the people, political advantage and other factors. Here is an example of the variations in the price of cooking gas (LPG) cylinders, a staple need  for most households, since  piped gas is not available very widely yet.

Economist Vibhuti Patel of Mumbai’s SNDT University points out that Mumbai has very high rents. She also says basic food items like vegetables, fruits and grains are likely to cost more in Mumbai than Delhi, since the latter is closer to Punjab and other agricultural states.

Injectable generic drugs maker Hospira Inc said it plans to buy a factory and a research center from India-based Orchid Chemicals & Pharmaceuticals Ltd for $200 million. The factory, located in Aurangabad in India’s western state of Maharashtra manufactures active pharmaceutical ingredients. It was constructed in 2000 and has 640 employees. The R&D facility in the southern city of Chennai has about 160 scientific personnel.

Lake Forest, Illinois-based Hospira said it expects the acquisitions to reduce costs, help supply key antibiotic products and pave the way for development of active pharmaceutical ingredients.

Chennai, India based CK Ranganathan and the company he founded, Cavin Kare, became noticed first with the success of Chik shampoo in single-use sachets that cost  half a rupee.  Even today most shampoo sales in India are units sold at about 2 cents a piece.

As this feature story, shows Cavin Kare is a story of ongoing nimbleness, entrepreneurial vigor and the ability to learn from mistakes, quickly.  Ranganathan talks about using bicycle-based distributors, about outsourcing virtually all his production in the beginning and more. There are no money problems, only idea problems, he says.

What this means to Foreign companies

Success in India can give new meaning to the term “think out of the box.” Indigenous companies such as Cavin Kare, Marico, Nirma are success stories in the CPG/FMCG  business in India. But foreign companies such as Amway, L’Oreal and Avon have succeeded by other ways to think out of the box.

How we can help

Copying your China business is likely to fail in India and you can’t duplicate Cavin or Amway either. India demands a unique solution for many CPG companies. The experts at Amritt’s consumer practice can help you find how to develop the unique and phased path to success.

Yahoo! India’s  R&D unit has set up a grid computing lab at the Indian Institute of Technology,  Madras in Chennai, India  to facilitate research on “big data” and cloud computing. This cluster of high-end servers at the lab will allow researchers to access web-scale data and conduct research on big data and cloud computing systems.

According to Business Line, the partnership will support researchers at IIT Madras to process and analyze huge volumes of structured and unstructured data which, to date, has been limited due to significant cost barriers in getting large computing systems operational. At 200 petabytes, the company operates one of the world’s largest private cloud infrastructures,  handling 11 billion page visits a month and 100 billion events a day from its 700 million users worldwide.

In an earlier blog post, we revealed how Yahoo believes that 30 percent of its overall IP portfolio is being developed in its Bangalore, India facility.