By SONYA MADEIRA STAMP The Business Times, 27 July 2010
Last month, the Geneva-based international organisation Horasis hosted the Global India Business Meeting in Madrid with over 400 business and government leaders engaging in a dialogue on the theme Overcoming the crisis opportunities for India. The forum primarily sought to reflect on the need for Indian firms to build global and sustainable brands towards fulfilling the countrys potential as an emerging global economic power. While investments by the Indian government on the Incredible India campaign have helped internationalise the national brand, its impact has been largely confined to tourism. Among products and services, few Indian brands are familiar to consumers across continents. India is in fact conspicuous by its absence in this years list of Best Global Brands by brand consultancy Interbrand. When it comes to producing brands that people the world over trust, why has India yet to make its mark?
Many forget that although Indian businesses have been around for a while, some for over 100 years, the country operated practically as a closed economy until the 1990s. Before that, Indian companies were chiefly catering to domestic needs, which are extremely diverse. It was only in 1991 that India liberalised, giving foreign firms greater access to the local market. A few years on and through to the last two decades, Indian firms have become increasingly aggressive in securing footholds both onshore and offshore.
As government protectionism eased up, more and more Indian companies found the tenacity and incentive to compete head on with established MNCs. They moved quickly to take advantage of the opportunities in India and abroad, seeing growth possibilities in both developed and developing markets. In 2008, business conglomerate Tata Groups Tata Motors made a successful US$2.3 billion bid for Jaguar and Land Rover, two iconic British brands. Two years earlier, Tata Steel acquired Anglo-Dutch steelmaker Corus. This US$7.6 billion buyout was the largest Indian takeover of a foreign firm, catapulting Tata into the list of top five largest steel companies in the world.
Bharti, Indias leading wireless provider, recently took over Zains Africa operations for US$10.7 billion, making it the fifth largest telecom company in the world. Closer to home, Fortis, Asias largest healthcare chain, has been in the news of late with its CEO Malvinder Singh disclosing intentions to invest US$2.3 billion in the Parkway Holdings shares that it does not own.
These are the deals that have made the news due to their sheer size and their audacity. But there are also a number of less-familiar companies that have taken their brands overseas in a concerted effort to establish a global presence. The Mahindra Group, a US$6.7 billion conglomerate that has interests across sectors with a special focus on automotives, aspires to become Indias first global cult brand. Anand Mahindra, its vice-chairman and managing director, has announced a bold vision to create a niche for the Mahindra brand and Indian cars globally.
CP Gurnani, the CEO of IT firm Mahindra Satyam, is meanwhile driving the companys global brand rebuilding and recognition. Football fans would now be familiar with Mahindra Satyam, thanks to its advertising billboards at the World Cup stadium and for its winning partnership as the official information technology service provider for the World Cup. BrandFinance Global 500 rankings latest list now includes Tata, Reliance, State Bank of India, Airtel, Bharat Petroleum, Infosys and ICICI Bank. These companies span a range of industry sectors that India is not normally associated with such as banking, petroleum and telecommunications.
The list is expanding as Indian companies take their brands overseas, organically, through partnerships and aggressive acquisitions. But while corporate growth strategies may differ, there is a consistency emerging in Indian CEOs consciousness about the importance of brands. There is a growing recognition of the fact that a strong brand strategy enhances shareholder value. The task of brand management is now beginning to take root in Indian boardrooms instead of being just part of the marketing function.
More Indian companies are imbibing the intrinsic value of the brand. They realise that more than just a logo, the brand embodies the essence of a companys vision, strategy, business outlook, culture and more. If a brand succeeds in the disparate and diverse entity that is India, it is comparatively easier to consider overseas expansion and amend the lessons learnt to cater to geographies further afield.
And India is not alone in its need to build more brands. Collectively in Asia, there are less than 10 strong brands, claims branding expert Martin Roll. Branding, he says, is about creating iconic brands, and Asian brands need to capture the spirit of the region and to lead the way by creating that spirit.
People the world over continue to associate India with generic brands such as yoga, basmati rice and Bollywood. What India needs is one solid mass consumer brand that has the potential to top the charts, and to achieve that, companies need to be innovative to the extent of becoming global trendsetters in more than one sector. True, India has come a long way from its elephants and bullock carts image and is increasingly seen as aggressive, business-minded and capable. However, the biggest test is yet to come. With McKinsey outlining the growth of emerging markets as the next crucible for business growth, it remains to be seen how Indian brands will tackle developed markets such as the US and Europe. On a high note, the Tata Groups Indian Hotels and Mahindra & Mahindra made this years Credit Suisse Research Institute list of 27 Great Brands of Tomorrow. Perhaps this is the beginning of a story we will see more of in the coming decade.
The author is managing partner of Rice Communications (Singapore). She chaired the panel discussion entitled Indian Brands: Moving up the Global Level Playing Field at the Horasis Global India Business Meeting in Madrid, Spain, June 21-23, 2010