Passage From India

There is a spectre haunting Indian consumer goods manufacturers. As global products flood the shelves, and unlike earlier times at extremely competitive prices, the Indian manufacturer faces a clear choice: go out into the world with your brand, or be satisfied for the rest of eternity with being a cheap supplier to global brands. But if he has to even tread the first path seriously, the "Made in India" label has to become far more attractive across the planet.

Yet, a few years ago, when then finance minister P. Chidambaram announced the Brand Equity Fund to promote the Made in India labelled brands across the world, with the government contributing Rs 50 crore and private industry the rest, hardly anyone was interested. What happened? Have restaurants all over England added Kingfisher beer to their curry-heavy menus? Have Tata trucks taken a slice of Volvo’s or Iveco’s market in the Middle East? Have Raymond or Vimal solidified their position in the US? Have consumer durables company bpl progressed beyond those catchy Amitabh Bachchan campaigns which portrayed the electronics giant as an Indian group taking on the might of global brands abroad? How successful is the Oberoi group internationally against Hilton?

To be honest, there’s hardly any movement. Commerce ministry officials, who had launched the Brand Equity Fund with lot of fanfare and said it (read Indian companies) would travel to various countries whenever New Delhi organises trade fairs or gala shows, today refuse to talk about the corpus. Many privately admit the fund has almost died as new priorities have emerged in the changing global economic scenario.

But then, what are the priorities? Ogilvy & Mather head Ranjan Kapur calls it the ethnicity complex that continues to haunt Indian brands, both at home and abroad. "Perhaps it’s the ethnic image which works both for and against Indian brands. And Indian companies love it because ethnicity pays off as an initial advantage and provides the brand some kind of leverage. Bukhara, Kingfisher and fashionwear continue to ride this wave. But the moment you are out of it, the tension starts," explains Kapur. He cites the example of Titan which upset the hmt applecart because it was projected as a "truly Indian" brand of international quality but when it travelled abroad, not many equated India with "classy watches".

So what is India equated with? Mysticism, snake charmers and ayurveda? It was this very stereotype the Brand Equity Fund wanted to remove but failed miserably as Indian companies themselves ran shy of spending. Says economist Jairam Ramesh: "Indian brands have given almost all global brands a tremendous run for their money but never wanted to carry the battle to alien turf. The Tatas having been selling tea for generations but to capture the UK market they required the Tetley brand. There’s no rational explanation. Today the reason that there are very few takers of the Made in India label is also because not many ventured out. So the stereotype has remained."

"Who will take India seriously? The IT revolution has helped a section of the people and bulk of them have moved abroad. So there is a bit of seriousness in that sector. But the rest remain totally mired in inward-oriented economies. It’s not a problem of product; it’s more a problem of image," says Joint Communications creative director Shivjeet Khullar.

Perhaps that’s the reason when the UB group launched Kingfisher beer in London, it avoided talking about the Made in India product on the streets and quietly targeted Indian restaurants and pubs. The rationale was simple. The UK’s sizeable Asian population would anyway understand that the brand is Indian. Thereafter, the brand slowly moved into English restaurants and now it’s available in a large number of departmental stores. "Today those who consume Kingfisher know it’s Indian. Like when you pick up a Carlsberg you know it’s from Denmark. We do not have to say it in as many words," says Shekhar Ramamurthy, divisional vice-president.

It’s similar for companies like Videocon which, of late, have been advertising heavily in international publications like Financial Times and Asian Wall Street Journal, ostensibly to inform international consumers that Indian brands can match global standards. Or, for that matter, campaigns from Grasim Industries which inform the world of Kumaramangalam Birla’s passion to become a global aluminium giant. The Made in India label is subtly displayed, primarily because the world would rather take an Indian entrepreneur seriously, not the nation as a whole.

So what happens to Indian brands as India keeps opening up its markets further under the wto agreement? "It’s not the task of the government to help promote the Made in India mark but companies which have a vision. The government can only help. Tata trucks, Bajaj scooters, Ashok Leyland buses, Darjeeling tea and Kingfisher beer have travelled across the globe. Others should follow," remarks hta chairman Mike Khanna. "Though it’s a slow process, the awareness about Indian brands is growing and I am optimistic that the Made in India label will don many more shelves in years to come." Mudra Communications ceo A.G. Krishnamurthy shares Khanna’s optimism. "The biggest brand is Indian brainpower," he says. "Just look at the movers and shakers of the new economy and you have the answer."

bpl corporate brand management head Anand Narasimha feels that in the longer run, the brand needs to travel out of what he calls fixed, standard markets with marginal protection. "Any brand which does not take cognisance of emerging market trends will suffer because global brands will almost double in the Indian market and there will be extremely competitive rates," says Narasimha. "Sooner or later we will also have to decide whether we will remain suppliers to global brands or get more aggressive abroad. It’s a call which we, not the government, have to take. We will obviously have to match our products with those from global giants like Panasonic, Sony and Thomson."

Industry observers feel the onus remains more on the companies which should pick up small pockets of the non-resident Indian (nri) population across the world for the initial penetration and then create a brand awareness to rope in other consumers in these countries. But then, how many will do it? Advertising guru Alyque Padamsee feels not many Indian companies would venture abroad and sustain brand building expenses. "They have not travelled anywhere. Look at Vietnam, a market which was completely virgin some years ago. How many Indian companies thought of looking at such opportunities?"

Many feel it’s also the domestic sustenance factor which most Indian companies use as a barometer to evaluate their strengths and accordingly decide their priorities. "Indian companies continue to be inward-looking and not outward-looking. Not many among them want to pick up the challenge of getting into a virgin market and grow through a sustained brand development exercise. I think the issue is whether Indian companies have enough strength to back the brands in international market where no form of protectionism works," adds Khullar.

And as global consumer brands find it easier and easier to get on Indian shelves, observers say it’s possible that more and more Indian companies would shift their attention to regional markets, leaving the national stage to the mncs. "The tussle in the cities would become fierce as the consumer would realise it’s extremely easy to pick up world-class products at affordable prices," says advertising and marketing veteran Ajay Gupta. "Only those (like IT companies) who can match the global giants in class will survive, both at home and abroad. And for that you do not need any government’s help. I don’t think Narayanamurthy required it to make Infosys a global brand."

And perhaps there lies the most crucial answer. For the companies. And the government. As markets integrate with changing economies worldwide, Indian companies must realise brands are more than an indulgence in luxury; it’s an overwhelming necessity in the market-driven economy. It helps cement the foundation of both today’s business and also of the future. After all, today’s bottomline is as important as tomorrow’s.