India — Balancing the old and the new

Sandeep Das
Aug 26, 2017 · 8 min read
Photo courtesy: Dr EG

I originally wrote and published this article in LinkedIn Pulse a few months back. My intention was to refresh the article and publish an update here on Medium. After having read the article in detail, I didn’t feel the need to update it, but you are the best judge. Below is the article exactly as I wrote it a few months back.

It’s time that I wrote a piece on India. I have been out of the country for more than 8 years now, but the evolution of branding and marketing in India continues to fascinate me. Very recently, my wife came back from India with some brands that both of us grew up with. Consider this a tribute to the yesteryears of brand building in India and how the discipline has successfully transformed itself as India as a country has gone through dramatic change.

My sources of keeping track of what is happening in India on the brand building front is not any different from that of a typical NRI — online versions of Indian newspapers, regular chats with friends and family members back in India, dialogues with acquaintances who visit India regularly and keeping ones eyes and ears open on your own personal visits.

If there is one single factor that has influenced the way brands are built and marketed in India, it is the “arrival and the pace of change”. This thoughtful article from two BCG India partners look at the impact of constitutional, political, social and cultural change in the country and how change management has become a strategic imperative for Indian organisations:

What does this mean for brands in India? The transformation of India’s consumer demographics, consumer behaviour, attitudes towards life, media consumption habits and the emergence of new engagement and selling platforms has meant that brands have had to let go of some old traditional thinking and embrace new forms of consumer engagement.

Talking about new channels for brand engagement in the country, Facebook has just tied with Airtel to setup hundreds of Express Wi-fi spots in areas with poor connectivity in the country. The proverbial next step to this development will be Facebook using these new nodes of connectivity to push branded content to users. This is just one of the few examples of how consumer touchpoints for brands have proliferated in the country.

In addition to the increase in the number of touchpoints, there has been a corresponding increase in the size of brand portfolios. One of the defining characteristics of the change that India has gone through, is the globalisation of tastes and preferences of the Indian consumer. This has led to two things — higher levels of exposure to global trends and brands and exponential increase in the need for novelty in brand experiences.

This ever increasing need for choice is emboldening Indian FMCG manufacturers to expand their reach and enter new categories. ITC, an erstwhile tobacco turned FMCG manufacturer, is now harbouring ambitions to directly compete with the likes of Nestle India and Britannia in their home turf (packaged foods) with a potential of 40 new product launches lined up in 2018 (according to ITC they will be a mix of range extensions and completely new innovations).

The global players are not sitting and watching on the fences either. When I left India, Hershey’s didn’t have a presence in the country. Now it has a successful portfolio of brands, which include Sofit, Hershey’s Syrup, Jolly Rancher, Jumpin and Soft. The venerable PepsiCo, with a long experience of navigating competitive pressures and unique category dynamics, is taking a leap into the unknown by introducing its Quaker Oats brand in the RTD milk category.

The aggressive expansion plans of both domestic manufacturers and multinationals by entering new categories signifies one thing — even with a significant level of brand proliferation, there is still room for more.

“One of the learnings is that Indian consumers are driven by newness. If you don’t change your products constantly and provide a reason to buy this year’s version compared to last year’s version, which has to be visible to the customer, you are basically out.” — Michael Mayer (Director, VW Passenger Cars, Volkswagen Group India)

Going back to fundamental economic principles, India as a market, and more specifically for brand building, is still immature. There is still significant growth potential to be tapped into (although some of it might be inflated) and there is no lack of innovation (which can be gauged by the number of line extensions and NPD launches that have happened in the country). This end-2016 report from Mintel on the most innovative food launches in India for the year brings out the proverbial need that drives such launches in India — the need to hold on to the old while embracing the new.

Brand building in India still needs to consider two critical elements — imbibing the collectivist nature of Indian society (starting with the family) and the confidence derived from striking a balance between the traditional and modern. Consider the following examples, which have tried to redefine the relationships that distinguish Indian society:

BIBA — A different take on the concept of arranged marriage

Ariel — An attempt to redefine the man-woman relationship in terms of sharing household chores

Tanishq — Continuing on strengthening the brand’s equity on being a proverbial bond in deep family relationships

Outlook India ran this thought provoking piece on how Indian advertising is slowly moving to a stage where the role of women in the society is being given due credence and different forms of stereotyping (a blot on Indian society) are slowly being dismantled:

Brand building in India can be defined in a single word — complex. Previously the complexity could have been defined on two dimensions — the complexity of culturesand the variety of languages. Two more dimensions now need to be added to this pot — the proliferation of brand choices and the increase in the number of touchpoints / selling channels.

Out of these four factors culture still (and will continue to) dominate in India. Multinationals and domestic manufacturers fret about the challenges faced from the emergence of mobile, the death of traditional retail and kirana shops, the rise of online retail and a transformation of preferences. These are all important factors that will influence brand building in India, but nothing still comes close as the importance of culture. Why an Indian consumer buys, how he or she buys it and where he or she buys it, is still strongly influenced by culture.

This image of a new range of products from the Kellogg’s India website epitomises how it cracked the Indian market:

Moving away from FMCG to co-working spaces for a moment — global co-working spaces giant WeWork plans to expand into India, with a special focus on working hard to understanding the nuances of Indian culture when it comes to work and office spaces. Culture is the first thing brands need to listen to when building equity in the country.

A discussion on brand building in India is not complete without a proper acknowledgement of the impact of retail formats. Amazon launch in India in 2013, which seems like eons ago. The current Indian online retail landscape is a battleground between Amazon, Snapdeal and Flipkart (with rumoured merger talks between the two). But India is not a market that can be won based on sheer retail strength. If there is one bandwagon that brands shouldn’t ride in India, it is the one that says ‘online retail is the future’. India is online retail’s graveyard, with the responsibility lying on Amazon’s shoulders to turn around that perception.

Let’s take the point of view of two people who have the right to give a point of view in this matter:

For the Bollywood uninitiated who read this article, the references are to a blockbuster film of yesteryears and some of its eye-catching dialogues:

Culture also plays an important role in the success or failure of online retail in India. A fact that has taken the luxury industry almost a decade to address, is still at play in the Indian market. It is the need for “look and feel”. Below are some examples of how small and medium-sized brands are getting around this problem using pop-up stores as a format.

As IKEA readies itself to launch in India by December 2017, it gives credence to one single aspect that has provided it with confidence for the launch — three years of in-depth understanding of the Indian consumers’ preferences for furniture types and design. This led the brand to understand important localisation factors around the love for colour and colonial furniture designs and how to balance it with IKEA’s Scandinavian minimalist design heritage (and more importantly the DIY mindset) — Indians are used to domestic and external help when it comes to furniture projects.

Even with all the complexity and challenges, building a brand in India is not rocket science. It is about disciplined application of localisation principles. It is also about building trust and belief, in order to reign in the need for constant change. Even with the myriad of choices available at their disposal, the average Indian consumer can be surprisingly loyal even today. This sense of loyalty towards our choices is also deeply rooted in collective behaviour, in which choices were a collective behaviour and individual preferences were negated using a “show of hands” principle. As Indian society gradually moves towards a more nuclear family and single household structure, brand choices have become more independent and less loyal. Repertoires have increased and brand life cycles have shortened. But an Indian consumer still believes in choices made by the heart, rather than the ones made by the mind. Any brand that has ambitions of scaling the Indian market, needs to respect these principles.

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