Top Brands in India are Home Grown

When U.S. and European brand marketers are talking about opportunities for global growth, India, which is promoting its own brand image, is often mentioned as a most desirable emerging market, second only to China. But brands from outside India apparently have a lot of work to do to penetrate this market.

According to a new survey, seven of the ten top brands in India, at least in terms of "thought leadership," are brands born and bred in India. The "Index of Emerging Market Thought Leaders" surveyed Indian government ministers, directors of leading companies, and newspaper editors and was conducted by the TLG consultancy in collaboration with international research firm GlobeScan.

Survey respondents were asked "to identify corporate brands with the power to change the attitudes and behavior of consumers, employees or politicians," according to The Economic Times of India.

Five years ago, we asked: "Where are Indian brands on the global stage?" Now, survey respondents ranked Infosys, an Indian IT company, and Tata, an Indian diversified conglomerate, as the top two thought leaders. Maruti Suzuki, India's largest car-maker, was number 4.

The other Indian firms in the top ten were engineering firm Larsen & Toubro (5), State Bank of India (7), Indian joint venture Hindustan Unilever (9) and the Mahindra Group (10). The only non-Indian firms to crack the top ten were Google (3), Nokia (6) and Facebook (8). No other Western brands were even in the top twenty.

Malcolm Gooderham, founder of TLG, told The Economic Times that "the absence of many 'Western' major brands from the top 20 may concern CEOs who are trying to crack the BRICs [the acronym commonly used for Brazil, Russia, India, and China]. They need to refocus their energies on telling their leadership story."

The survey report suggested that the Western firms that succeed in India "are those that adapt their models to local conditions, or ones that form JVs [Joint Ventures] with locals in the driving seat." The report noted the conspicuous absence of Apple in the top twenty list, referring to the company's "failure to adapt" to local tastes and budgets. "Indian consumers can buy a new Tata Nano car for the same price as three Apple iPhones," the report stated.

Meanwhile, only 30% of the world's top 500 luxury brands are present in India, compared to 70% in China, according to industry estimates. India accounts for less than 1% of the global luxury market vs. China's 10%. But the Indian luxury market is projected to grow from the current $3 billion to around $30 billion by 2015.

One reason for the low penetration of luxury brands is the fact that there are few centers of luxury in Indian cities, such as Fifth Avenue in New York or Bond Street in London. Jaideep Wahi, director of retail services in India for real estate firm Cushman & Wakefield, told India's Business Standard, "Main streets in India unlike their European or American counterparts have a tenant mix, which is unappealing to luxury retailers, besides lacking basic infrastructure facilities for shoppers such as proper pavements and parking spaces."

Instead, luxury brands are sold primarily in top luxury hotels or in the scant number of exclusive malls, such as the newer DLF Emporio in New Delhi and The Collection at UB City in Bangalore. As a result, luxury brands are looking at two other outlets in India, according to the Business Standard — international airports and "hybrid" retail formats. Airports offer a controlled environment with access to upscale international travelers. Hybrid retail formats, in which luxury brands can co-exist with premium brands, are another option, since it is expensive to develop additional luxury malls.

So for now, at least, luxury brands knocking on India's door will have work around local conditions that make it challenging for their brands to gain broad exposure.