Age of an Indian brand indicates its challenges and opportunities
The age of every Indian brand corresponds to a particular period in India’s political and economic development. These periods influenced the brands in their formative years and continue to shape them and define their potential challenges and opportunities.
Brands under age 23 were established since 1991, after India’s economic liberalization. Brands age 23 to 67 emerged prior to liberalization. And brands older than age 67 came into being during the period before Indian statehood, in 1947.
Of the Top 50 brands, 14 were formed after liberalization and 15 were formed before independence. Although roughly the same in number, the brands formed after liberalization account for 44 percent of total brand value, more than double the percentage value generated by the older brands.
Twenty-one Indian brands, the greatest number, fall in the middle group, formed in the period after independence but before liberalization. In comparison with other BRICs, the greatest number of Brazil Top 50 brands were formed over 64 years ago, while around three-quarters of the Chinese Top 100 were created less than thirty-five years ago.
Two reasons explain the relative youth of Chinese brands. First, the “Reform and Opening Up,” started in 1978, stimulated growth and brand development. Second, the BrandZ™ China analysis includes the Top 100 brands, and the brands ranked 51 to 100 are younger.
After liberalization in 1991 - Under Age 23
Two cataclysmic events shook India’s economy and politics in 1991. Until then, the Indian government had depended on centralized economic control to drive development and protect Indian businesses. The approach limited Foreign Direct Investment and growth.
By 1991, India verged on default. The country also was in the midst of contentious elections that intensified ethnic and religious divisions. Assassins killed Prime Minister Rajiv Gandhi while he was campaigning.
Emerging from this trauma, India began to implement reforms to encourage a market-driven economy and a more inclusive polity. Brands formed after 1991 developed in this robust outward-looking India working to find strength in its diversity. Economic change evolved slowly, however, with its effects felt unevenly across sectors. Brand examples
Recognizing the importance of telecommunications to national development, the Indian government opened the sector to competition in 1994. Several brands formed soon after: Airtel (1995), Idea (2002), and Reliance Communications (2003).
The insurance sector opened to international investment in 2000, enabling joint ventures that combined global best practice experience with local insight and access to rising middle class consumers. That same year, several UK and Indian financial services companies created HDFC Life and ICICI Prudential.