Local, not global: Indian brands are rare in foreign marketplaces

News that several global private equity firms are queuing up to buy a stake in snack-food major Haldiram’s is a reminder of the relative rarity of Indian brands in the global marketplace. Ever since the Indian economy opened up to global competition in 1991, it is foreign names that have come to dominate Indian homes. Many Indian brands have either disappeared or ceded space to foreign competition. Where Onida and Videocon once dominated the domestic market for TVs, washing machines, and household appliances, Japanese, Korean, and, increasingly, Chinese brands now rule the showrooms. In cars, the Premier Padmini and Ambassador vanished when Japan’s Suzuki set up its joint venture to launch the Maruti, an Indian brand only in name. Here, too, it is the Japanese, Koreans, Germans, and Chinese that offer consumer choices, with Tata and Mahindra & Mahindra being the only indigenous exceptions. In fast-moving consumer goods, brands such as Anchor, Nirma, Uncle Chipps, and Binny’s, which once gave multinational players a run for their money, have all vanished or receded to the margins of the market.  Haldiram’s, in contrast, is one of the handful of Indian-owned and -developed brands that not only grew but held its own against the snack foods flood from multinationals such as Lay’s, Nestle’s, Kellogg’s, and Haribo’s. More to the point, it took its brand global, with factories and restaurants in the United Kingdom, North America, Southeast Asia, and West Asia. Amul, the flagship brand of the Gujarat Co-operative Milk Marketing Federation (GCMMF), is another notable exception. The pride of India’s White Revolution, it is now a Rs 80,000 crore brand that strongly expanded its core business of milk, dairy products, and chocolates, against growing competition from both the unorganised sector and entrenched global brands. Apart from exporting to over 50 countries, including the United States and European Union, Amul is now a member of the Global Dairy Trade, a platform where only the world’s top six dairy players sell their products. In the main, however, indigenous brands overseas are thin on the ground. Bajaj’s two-wheelers, with their decades-long presence in Africa and West Asia, and Airtel, with its pan-African mobile telephony network, are others that have entrenched markets overseas.  The abdication of Indian brands to global competition — with many of them converting themselves into contract manufacturers — reflects the lack of long-term thinking and strategic imagination, which are critical to brand-building. These shortcomings demonstrate how the habits of the protective licence raj have weakened corporate competitive abilities and thinking. This is not to say that Indian business is not capable of parrying global competition. Many of those that have been successful at doing so have evolved in the crucible of open competition. For instance, airlines such as Jet Airways (until it imploded), IndiGo, and Vistara (until it merged into Air India) have carved a space for themselves in international skies in the face of formidable competition from the world’s biggest airlines. Now, with single malt brands such as Amrut, Rampur, and John Paul’s making heady inroads into a space dominated by Scots breweries, there may be reason to raise a glass to the ability of young Indian brands to become truly world-class.