Monday, February 02, 2009

Local Brands in India

The all too familiar trajectory of Indian businesses is to go national, almost immediately after start. I am on the same side, all my business plans always had a pan-India ambition. Of course, most Indian businesses worth its salt are 'national' businesses, and even suppliers, customers and regulators usually equate national presence with business maturity.

However, beneath this 'national' surface, lie three important facts: One, India is diverse and states and regions are very different from one another - so going national is almost as complex as going international in another country context; two, there are many very successful local brands, which are doing very well by their own right and are fabulously profitable; and three, the concept of a homegrown corporation is adored and championed by many Indian states, look how keenly Satyam was supported by Andhra Pradesh government and how closely Infosys is associated with Karnataka or NIIT with Delhi. True, all the companies I mentioned here grew out of their base and became truly national companies, but they received a fair amount of support and adulation in their home states which enabled them to go into the breakout stage stronger.

I think this is an important story which we often miss. The Indian identity is based on a bias towards a strong union, and often the state/ regional roots are downplayed. In fact, many times, it is perceived to be politically incorrect, and media will usually shun great regional champion stories. But, this is possibly a flawed mindset, and a brand marketer, particularly working on brand introductions in India, may need to plan for regional differences more seriously than they do today.

I also think that the regional differences in India are widening. This is happening despite the rapid economic integration of the country, and unprecedented movement of labour and capital from one region to another in the recent years. The Indian society has gone through a rapid shift, including a rapid rise in interethnic and commuter marriages. But, at the same time, the ethnic characteristics are being further emphasized and becoming relevant for business. This is the perennial paradox of globalization: Once the economy becomes more global, the cultural identity becomes more local. On a micro level, someone told me that she appreciated her Marathi roots more once she got married to a Tamil, and lived happily thereafter with two separate cultural spheres in the family.

In this context, there is wider scope in creating great local champions. I can talk about dozens of local/ regional brands, like Subiksha/ Trinetra in retail, Karrox/ Brainware in education and P C Chandra in Jewellery in West Bengal. Each one of them created very powerful brands, without having much influence outside their home states. These businesses actually present powerful templates to follow, though the media and public policy-makers have to wake up to the possibilities of the local champions.

At a business policy level, it is actually prudent to treat India as an aggregation of markets, rather than one market by itself. It is more relevant than past today, as the regional variations will become more prominent and the need for political correctness will disappear. The state government policy will also go through a notable shift - from an open-doors business policy, it will move to the promotion of local champions; not necessarily through protectionism, but through support and incentive of local entrepreneurs.

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