Is origin important?
Shiv Shivakumar
|Non-Exec Chairman, BOD – BKC India | Advisory Board-Multiples Equity | BOG -IIMU; Board Member-XLRI + XIMB | Ex Chairman & CEO – PepsiCo India | Ex CEO, EM - Nokia
This is my piece, published today. I have always been amused at these Indian brands versus foreign brands debate in India. This kind of debate doesn’t exist in most parts of the world since the role of a brand is to fulfil a consumer need, want or desire. If that need, want or desire is nationalistic in nature, then there is a place for an Indian brand, else, the brand which best serves that need, want or desire will always win irrespective of its origin.
More brands have been built in India in every category since 1991 for the following two reasons:
a. The spread of Television after Low Power Transmitters were installed and also the rapid development of local content. This made advertising possible in local language to the target audience
b. The emergence of a new brand of Indian creative led by Piyush Pandey, Balki, Aggy and Prasoon Joshi. The majority of their creative work was for local brands across categories.
The world is changing today and the concept of origin is more in the business press and not in the minds of the consumers. Let me explain with a few examples:
a. Hamam, Nihar were bought by Hindustan Unilever from Tomco (Tata Oil Mills). Nihar Oil was later sold to Marico by Lever’s. Their fortunes haven’t changed with ownership and neither does the consumer worry.
b. A lot of fashion brands like Louis Phillippe, Van Heusen, Allen Solly and Peter England are now with The Aditya Birla Group. The consumer does not think of them as Indian.
c. MTR (Mavalli Tiffin Room) is now owned by a Norwegian PE firm Orkla and the erstwhile liquor brands of McDowell’s and United spirits are now owned by Diageo. Nilgiri's, the Bangalore food retail brand owned by a family, then by a PE firm is now with Future Group. Is the consumer complaining about this lack of Indian ownership? The answer is NO.
d. Lakme, a home-grown cosmetics brand which started business because Pandit Nehru asked the Tata’s to build a beauty brand for Indian women is now housed with HUL. Is the consumer unhappy? No!
e. Jaguar Land Rover is doing well across the world, more so in China. People haven’t rejected it because it is owned by an Indian Group!
f. Luminous was an Indian brand which was then sold to Schneider, a French company. It is doing remarkably well in its new home.
g. ITC has built a number of non-cigarette categories in the last decade by leveraging master brands like Wills. Ownership has hardly been a hurdle on this path. It has also bought a number of brands from other multinationals in this period.
h. Hero Honda is now Hero and doing just as well. Maruti Suzuki stands for best value cars. Mahindra Jeep is not an American promise today.
i. The Mobile handset market was dominated by Nokia, a Finnish brand followed by Indian brands and now by Chinese and Korean brands. Freedom 251, an India phone offering was still born.
j. Patanjali has made giant strides with its Ayurvedic platform and turned it into a nationalism movement. I worry about the brand, with its extension into numerous categories.
k. Paul and Shark has India flag Polo T shirts. It doesn’t make it an Indian brand but it has an Indian offering of some patriotic value to some consumers. Swarovski is doing a lot of Indian god statues. Canali does a bandh gala now.
Branding was English language led and multinational led in the early 70s in India. Nescafe, Liril, Surf were examples from this era. Thanks to Piyush and his tribe, advertising is more Indian today than ever before, it is based on Indian insights, Indian idiom and adapting global insights in an Indian way. Indians love brands wherever they come from – India is a rare country where wires, taps, cement, and steel get advertised.
Fifty years ago, only international firms had access to technology, capital, branding etc. Today the world is wash with professionals in every sphere and every company, big or small, Indian or otherwise has access to this talent. This democratization and easy availability of talent has increased the odds of anyone winning in the marketplace.
Brands win when they are consistent, when they innovate ahead of the curve and provide the right value to the consumer. Snob value or aspirational value of something foreign does exist in a few categories but that is not something Indians will pay for beyond a certain price point.
I have always admired some ‘Indian’ brands – Amul, IPL, Mother Dairy, Indigo, Jet Airways, Fogg, and Hero. They are as good as any brand outside of India as they are consistent and provide great value.
Building Advanced supply chains solutions in Aotearoa | Data-driven dynamic inventory control and scheduling | Doctoral Research Fellow at The University of Auckland | Oasis Engineering (2003) Limited
5 年Other notable examples are Ola, which has expanded across the world with services in UK and Australia and Oyo, which is pursuing a global expansion strategy! However, while consumers are more open to brands which offer more value and constantly innovate, in my opinion, with agile product development strategies and technology disrupters hitting the market often ,customer retention and loyalty requires more attention and depends on a lot of other factors, which can often be and remain intuitive, apart from giving incentives for repeat customers etc , such as an executive going an extra mile for serving the customers etc- known as delight factors according to Kano’s model of customer satisfaction. A simple example of a customer retention strategy that is more intuitive is often adopted by jewellers , in many cases, do not deliver the purchased jewels straight away, but give it by invoking god, since buying buying gold is considered to be auspicious- it appeals to a person’s psyche. With services going digital, machine learning can be used to a greater extent here, in capturing intuitive feelings such as specifically curated plans and services provided for every individual, according to an important event in a person’s life etc.
Operations & Supply Chain Professional | FMCG & Pharmaceuticals l Ex-ACG l Ex-PepsiCo l Ex-Wipro
5 年Excellent summarisation for performance of brands which are doing great irrespective of its transition to ownership.It is really unaffected till it is centralised around customer.
Managing Director at Umicore Autocat India I Country General Manager India at Umicore I Board Member Indo-Belgium-Luxembourg Chamber of Commerce & Industry (IBLCCI) I Ex-Aditya Birla Group
6 年Excellent encapsulation of changing Indian Brand landscape. Well captures - why brand should do well- undoubtedly its “value proposition”. In the times when market, consumers are ever-changing in all facets of consumption it’s a daunting tasks on brands to stay relevant...Importantly, for brand to be successful it not just brand and advertising that will yield results - but how the entire organisation is tuned to deliver brand promise. Be it B2B or B2C!!
Sports Sales at Viacom 18- Jio Cinema & Sports 18 | Ex- Times Group | NMIMS Mumbai
6 年Shatakshi Mittal