Capillary: An Indian Start-up Deepening Its Presence in China

Capillary Technologies, an Indian customer relationship management software as a service company, provided cloud-based omnichannel customer engagement and related services to retailers and brands. In a country well known for software service companies, based primarily on labour cost advantages, Capillary was founded as a business-to-business software company (i.e., an intellectual property company). After entering several Western markets, which was consistent with its lofty aspirations, Capillary decided to pursue Asian markets. The new venture relocated its headquarters from India to Singapore and made strong efforts to gain revenue in the Asia region—including the large, but intensely competitive, Chinese market. Capillary started by working with Western multinationals that were its customers in other markets. The company then began attracting local customers, as it established a Chinese technology team to cater to the unique technological ecosystems prevalent in China. Over a three-year period, Capillary achieved 200 per cent annual growth. With the opening of a new office in Guangzhou, Capillary then hoped to further deepen its presence in the Chinese market. What could the general manager do to help Capillary reach this goal within the next three years?

This case is intended for undergraduate- and graduate-level courses on entrepreneurship, and international entrepreneurship within a wider international business. The case may be used in the first session of a course as an introduction to the internationalization process and/or in a session focusing on the importance of learning in international markets. After working through the case and assignment questions, students will be able to do the following:<ul><li> Recognize the non-linear process of internationalization that a new venture may experience as it adjusts its priorities in terms of foreign market selection.</li><li>Appreciate the key success factors—such as innovation, networks, and especially learning—for a resource-constrained young firm when it spreads internationally into a challenging new market.</li><li>Become sensitized to some of the issues that a non-Chinese firm must consider when operating in the Chinese market and the vital importance of maintaining a learning orientation.</li></ul>

• chinese market
• indian company
• CRM SaaS