A recent study conducted for FT by UK's brand consultancy Wolff Olins predicts that many of the world’s future global brands will come not from the west, but from emerging markets like India, China and South America. The agency has selected five brands that are big in emerging markets today, but virtually unheard of by consumers in the developed world, a list which includes India’s United Spirits and Chinese wine brand ChangYu and projects that these will rise to become the international brands of the future, as familiar around the world as Starbucks and Coke. Other brands mentioned include Lebanese chocolatier Patchi and Columbian coffee chain Juan Valdez Café.
The study has identified some key factors that has led to this shift. This includes global GDP increasingly being concentrated in emerging markets. It further puts forth that established developed world brands don’t necessarily know these markets as well and hence struggle to innovate effectively. Also, in this flattening world it is becoming easier for brands to fast occupy a niche, and then take on the world.
Many of these brands are carried around the world by diaspora – settlers in developed markets who yearn for a taste of home and offer emerging market brands niche footholds in economies around the world. Also, there is a progression by emerging market companies that will move up the value chain, from manufacturing to branded goods and services.
Speaking to Campaign India, Melanie McShane, strategist, Wolff Olins (pictured, below) said that the agency had been studying the shift from West to East for a while. “Researchers in each of our three hubs (New York, Dubai and London) identified brands with potential – using our experience of working globally and their extensive networks. Potentials were evaluated against a series of criteria - ambition, ideas, competitiveness, management, alliances – to arrive at a short list. From these we found that the strongest contender brands had four core characteristics, namely regional strength; firm sense of identity (not imitation); valued (not low end or cheap) and impact (the ability to be hugely disruptive),” she said.
Explaining United Spirit’s projected rise, McShane said, “The company bought Whyte and Mackay brand and distillery to get into the lucrative single malt market, and the Bouvet Ladubay purchase gave them a fast-track entry into the wine market. Now it is injecting that expertise back into its Indian operation – creating vineyards in Bangalore that will be able to better serve the region’s increasingly refined tastes and thirst for the good life. Indian spirit and wine brands will soon become a feature of global supermarket shelves.”
Santosh Desai, MD and CEO, Future Brands (pictured, below) says he agrees with the projections, to some extent. “What it really says is that global brands of the future need not necessarily be from USA as has been the case usually. That’s an incontravertible point. Overall new sources of influence will always follow first economic power, which will then translate into brand power,” he added.
However he says he is flummoxed to see drinks/beverages as the category that has been projected to lead the charge. “There are enough categories in India where companies have a far greater advantage than in the spirits category. In the service category, for example, India has a distinct advantage. Whether its Jet Airways or The Oberois, wherever these are seen internationally, it is viewed as a great offering,” he says.
Ramanujam Sridhar, CEO, Brand Comm (pictured, below) finds the findings a little too optimistic. He adds, “Emerging markets like India and China are all critical and I am not questioning that. But for a brand to go global, you need one big strong market where it is well recognised, where one is making a lot of money and has substantial franchises. That’s when one is able to explore other markets. I have a reservation about United Spirits. From that stable, Kingfisher has a higher potential to be successful because in a market like,say, UK where there are many Indian restaurants, it is very popular and can straddle different markets. In their F1 races abroad, the company has been using Kingfisher branding so that the brand itself gets recognition across markets. Within that portfolio, however, I cannot imagine a McDowell’s No. 1 having a scope in other markets. It has considerable competition in India itself. Of course, name recognition which is the first part of the brand awareness process is already established."
He further adds, "Among Indian brands, I would say Kingfisher has that capability and as we are seeing now, a brand like Jet is being recognised by international travellers by name, though I have reservations on their sudden focus on the lower end of the market.”
He believes India’s strength will be in building B2B brands. “In software services, India has established herself. These brands may be smaller in size than international rivals, but they are still well recognised, even if it will take a while for them to climb up the value chain. We have to redefine what we mean by branding and go out of the classical domain of a McDonalds, Nike or Pepsi.”
Kiran Khalap, founder, Cholorophyll (pictured, below) feels that among Indian brands Mahindra & Mahindra probably has the best global strategy in mind. “Mahindra actually pursues the idea of being a global brand. They have created special products to cater to the US market alone. The 4X4s that they are creating are all made with a view towards that market.”
He feels that the brands which will become global in future will be those that allow consumers to participate in the co-creation process. “Look at the growth that companies like Facebook and other online brands are experiencing. Al Gore’s TV channel Current TV has 13 million paid for subscribers and counts 70% of its content as being user-generated,”he added.