Do we have Indian Brands which are truly Global?
Indian companies have strong Brands developed in India, but do these brands have large presence/revenues from outside of India? And Is this really required?
Do we have Indian Brands which are truly Global? By Global we mean meaningfully present(size) in major markets across the world and competing with Global brands in those geographies?
Global Brands
What is common amongst - Dove, Surf Excel, SunSilk, Coke, Pepsi, Colgate, Ariel, Gillette, Cadburys, Nescafe, Aquafina, Vicks, Minute Maid
All are major consumer product brands sold in most countries across the Globe from US to New Zealand and in between
All are brands with annual revenues of well over $ 1 billion/year
All are well known in India also in their respective categories
What is common amongst Unilever, P&G, Novartis, Pfizer, Pepsi, L’Oreal, Nestle, Mondelez, Toyota, Samsung, Honda
All large MNCs operating globally with 60% or more revenues from countries other than their home country
All have multiple billion dollar brands
All have large operations in India
Indian Brands
What is common between - Parachute, Britannia, Parle, Cinthol, Bingo, Fortune, Amul, Sunfeast, Thums Up, Wheel, Bisleri
All very well known FMCG Brands in their respective product categories in India
They successfully compete with the Global brands in India in respective categories
Presence outside India limited to fewer pockets/countries
What is common amongst - Titan, Mahindra, Dabur, Marico, Tata Consumer products, Airtel, Asian Paints, Sun Pharma, Lupin
Large successful Indian companies in revenues and also amongst the top companies in India in Market cap
Most of them have “presence in many countries outside India” but, International revenues are between 5% to 30% of the total revenues, with India being the dominant country for revenues
So, what are we driving towards?
Most Global brands and companies derive 60% or more revenues from outside their home countries
Most Global Brands/Companies across sectors have a strong presence in India and selling well in India
There are no Indian Brands/Companies with significant Global presence in their respective categories. Someone may counter that
Thums Up is a bigger brand than Coke in India and is a Coca Cola Brand - BUT Thums Up is sold largely in Bangladesh, Nepal, Pakistan, Sri Lanka outside India
Airtel is a strong telecom brand - BUT Africa contributes to less than 30% total Revenues, British Telecom is an investment, and the Brand in UK is BT and not Airtel as yet…
Amul is sold in US and has recently launched in Spain - But, Amul’s International revenues are < 5% of total. In US it is largely targeting Indian diaspora
Tata Group has 2 companies with Global Brands and significant sales
Tetley from Tata is the largest brand of Tea in UK - BUT Tetley is an acquired brand. The Indian Tata Tea brands have negligible presence in UK or in other countries outside India, despite 24 years since Tetley acquisition
Tata Motors has 60% revenues from International operations - BUT bulk of it is Jaguar and Land Rover brands (managed largely independently of Tata Motors India except at the Board level) which were acquired by Tata Motors in 2008. Tata Motors revenues across both passenger and commercial vehicles outside of India in Tata Brand name is less than 5%
Products from Dabur, Marico, Godrej Consumer, Parle are sold in more than 30-50 countries, BUT International revenues are only 15-25%. And in many cases international revenues are not necessarily from Indian brands.
Exceptions
Bajaj Auto calls itself “World’s Favorite Indian” and has revenues from International business at 35% of total. It is India's largest 2W/3W exporter with sales in 70+ countries across MENA, ASEAN, LATAM. BUT it is the 4th largest 2 wheeler manufacturer in the world & India after Hero, Honda and TVS
Large Indian Pharma companies have around 50% revenues from outside of India, with 80% of it from US. BUT most of international sales are of generics and very little from patented drugs, where the large Global Pharma companies dominate globally
Indian IT services companies like TCS, Infosys, Wipro, HCL have 90% revenues from outside India, BUT the largest IT companies globally by revenues are Accenture, IBM, SAP, Oracle and Salesforce with “Products”.
Indian companies ask, do we need to have Global Brands?
Why go International or Global?
India has a large domestic market which helps companies grow 10-20% in revenues YoY and trend is likely to continue in foreseeable future. And this growth comes with good profitability!
All Global companies are present or coming to India and Indian brands are competing successfully with them in India
International sales are a hedging strategy - 15-25% sales in countries outside India, is good risk management. And it keeps stock market also happy!
Indian companies sell in 50 to 75 countries outside India. BUT the focus is on South Asia, ASEAN countries like Indonesia/ Vietnam and Middle East, as people in these countries have similar habits/preferences to Indians and/or these countries have large Indian origin diaspora. In some cases Indian brands are sold in US/UK, but largely targeted towards cities/towns with large Indian origin population
Most consultants would suggest this route sure shot success for international expansion
Even Titan, owner of iconic brands in India, has adopted similar approach for International expansion in the recent past
By contrast Coca Cola is sold in 200 countries, Dove in 150 countries and Nescafe in 180 countries including all major mature markets
Developing Global Brands requires huge investments. Indian companies are hesitant to spend as returns will take a long time and are uncertain. Long gestation investments also impact profitability and stock price negatively!
Large Indian Pharma companies have around 35-40% revenues from US (The biggest market) through generics, so why invest in developing patents(brands) which are both costly and risky
TCS despite being largely services company has the highest profitability
Managing Global Brands requires moving from Geography based structure to Product/Brand structure. Unilever has Global product managers for its key brand who are responsible for development and nurturing of the Brands across geographies. This is not just an org structure, but a different mindset
So, is there a really need for Indian companies to develop Global Brands?
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