Is India on the threshold of brand colonisation?
Asanotherhome-grownsuccesssellsinternationally, BharatBambawale looksatwhatliesinstoreforIndianbrandsandthebiglessonsformarketers
Walmart now owns Flipkart. Add their 39 per cent share to Amazon’s 31 per cent and 70 per cent of Indian e-tail will be controlled by international brands. In smartphones Samsung and four Chinese brands hold 75 per cent of the market. In passenger vehicles, indigenous brands Mahindra and Tata Motors have a combined share of less than 15 per cent. The merged Vodafone+ Idea, (probably Vodafone for brand purposes), is India’s leading telecom with
433 million users and a capacity of 700 million or 70 per cent of India’s subscriber base. Rosneft will quickly scale Essar’s 3,500 petrol stations to 6,000. Indians can’t imagine life without Google and Facebook. Zara is streets more aspirational than Westside.
Is this an exciting sign of India joining the world? Is this an inevitability of India’s complicit metamorphosis from savings to consumption? Should we, wearing our consumer hats, succumb to the attractions and availability of the world’s top brands? Or should we, with our marketing hat on, feel an unease about the health and future of India’s own brands?
Five of India’s top 10 brands according to BrandZ’s 2017 ranking are banks. Of these, at number three, SBI announced a record Q4 loss. ICICI Bank (rank 5) and Axis Bank (rank 10) are caught up in reputation-damaging situations. None are torchbearers in innovation, service and satisfaction. The other two, HDFC Bank (Rank 1) and Kotak Bank (Rank 6) look strong. According to the report, the value of the India Top 50 is concentrated in the financial category, the list is mostly made of banks, which are primarily state- owned, and insurance companies.
India’s Number 2 brand Airtel announced its first quarterly loss in 10 years. Bajaj Auto (Rank 8) sold fewer motorcycles in 2017 than the previous year. Honda is growing much faster than Hero (Rank 9) and rapidly chasing down its leadership in two-wheelers.
Many recent international brands operating in India use global strategies. Some localise advertising, but everything else is driven by global teams. In principle, there is nothing wrong with this. But it is a delicate balance. When practiced well, global and local expertise works in harmony and the brand sees expansion, as with Maruti Suzuki. Practiced badly, in high- dominance lowtrust environments, the results can be dramatically contrary, as the McDonald’s imbroglio with Indian partners suggests.
What about international brands with long heritage in India and a considerable Indian ethos, such as Unilever’s Lifebuoy, Surf and Lux? International leadership of Indian brand strategy is widespread even among such multinational brands. Surf, Lifebuoy and Lux are controlled by off-shore global teams. What is true of Hindustan Unilever, which ceded brand leadership to global teams two decades ago is true of other multinationals.
Naysayers will point to bright spots. Asian Paints (Rank 4) on the BrandZ list, continues to scale heights. ITC’s FMCG brands are growing handsomely. Patanjali and IndiGo continue to make admirable progress. Thums Up thrives. A plethora of small and midsize Indian brands such as FabIndia, Ruosh, Royal Enfield and Haldiram’s have carved out strong territories. The naysayers will also point to the lack of success of many international launches in India—PepsiCo’s Kurkure, Fiat and GM among them. Also there are 38 local Indian brands in the top 50, marginally up from 35 in 2014.
India has its successes and that’s something to be proud of. But we should worry about losing ground to international brands. Here are some watch-outs:
First: let’s not mistake communication success for brand health. The canny ‘Murthy’ of the Voltas ads would not achieve much without features, price, distribution, installation, performance, running cost and service being equally compelling. Customer experience builds brand health, not ads. Attention to problems builds brand health. Product innovation builds brand health. Caring about relationships builds brand health. To be competitive on these, year after year, is a challenge brands have to meet, or they could fade the Micromax way. Second: When strategy becomes international, there are risks of overstandardisation or imposition. This curtails the learning and growth for Indian talent. Our bright young things will change from thinkers to doers and only do the things their parent companies want them to. What will become of our intuitive understanding of our country? Asian Paints’ present success rests on a brand idea in the 1980s/90s which made them irreplaceable in India’s festivals, when spiritual and celebratory home refurbishment is a ritual. The depth of such native insights cannot be taught, or easily explained, to colleagues from other cultures. Third: what will our brands invent and for whom? We have long prided our knowledge of India’s lowprice consumer. But today, when consumers easily forsake chocolates for mobile data plans, home-made for foil-packed and fixed deposits for EMI’s, do we really know Indian consumers better than others? Or have these changes levelled the playing field so that international brands can invent for India as well as, or better than our own? Indian brands are at an inflection point. Will we compete and conquer, or be colonised?