New Entrepreneurial Brands Disrupt the Indian Market

Global ideas, reinterpreted, meet local consumer needs

A new phenomenon – the emergence of new entrepreneurial Indian brands – is disrupting the Indian market. Many of these brands are recent startups. Because these brands are private, or still relatively small, they are not ranked in the BrandZ™ Top 50 Most Valuable Indian Brands. But they are already too impactful to ignore.

Having emerged mostly over the past two to five years, these brands are reaching consumers throughout India, usually with e-commerce mobile apps, and they are increasingly challenging the well-established brands of multinationals or Indian conglomerates.

The brands identify key insights about the Indian market, and usually introduce variations of existing ideas that are new to India. They have proved that local brands are capable of creating high quality products and services. Today’s Indian consumers expect quality, and these Indian brands have made it more widely available and affordable.

The appearance of these brands is the result of a confluence of factors, including: the presence of young, ambitious, and talented entrepreneurs; the availability of capital and the willingness of investors to take risk; and a low barrier to entry because many new brands are digital and much less capital intensive than manufacturing businesses. Perhaps most important, these brands find an enthusiastic audience of increasingly sophisticated consumers – in both urban and rural India – who now have more money, curiosity about brands, and willingness to experiment across multiple categories, including beauty and personal care, education, entertainment, FMCG, fashion, food service, grocery, and travel.

The increase in national pride also influences local brand popularity. Almost 70 years after independence, India has developed into a powerful and respected member of the global community. Simultaneously, almost in counterpoint to the rush of modernity, Indians express a growing preference for products based on historical Indian cultural inclinations and tastes. Foreign brands no longer enjoy special stature simply because of their “foreignness.” “Indian-ness” is “in.”

THE INDIAN EXPERIENCE

Patanjali is the best example of a brand that has understood and even cultivated the consumer interest in products related to Indian heritage. Started 10 years ago by a yoga guru as a niche brand of Ayurvedic products, Patanjali today offers a wide FMCG range that meets or exceeds major national brands on quality, trust, and authenticity.

Similarly, Paper Boat produces a range of soft drinks made from local ingredients that appeal to the Indian palate and inspire nostalgic reminiscences about simpler times. With its luxury Ayurvedic beauty and wellness products, the Forest Essentials brand has connected to – and advanced – the resurgent interest in how ancient Indian spiritual guidance can be relevant in the modern world. Its products, packaging, and stores also demonstrate that, along with providing products of higher quality and service, emerging brands improve the customer experience.

Chaayos creates a unique customer experience in its tearoom locations. Developed as an alternative to the myriad cafes, including Starbucks, that have opened in India’s major cities over the past few years, Chaayos understands the contemporary desire for a place to enjoy a break from daily stress, but responds with tea, India’s traditional drink, instead of coffee.

The emerging Indian brands also understand Indian attitudes about price. Price is important, but competing on price alone can make the offering seem cheap. Indian consumers seek value for money. They are willing to pay a premium, but only if it is justified. Marketplace brand Snapdeal and fashion brands like Myntra and Jabong reach consumers throughout India with their online presence, which is also the case with the cosmetic e-commerce brands Nykaa and Purplle. Indian consumers expect to find more discounts online. These promotions make the price point affordable to lower income consumers.

Some brands have identified needs that are fairly specific to India. For example, most Indian mobile phone users do not have contracts with their carriers. Instead, they prepay for time. When mobile users prepay using the brand Freecharge, they receive a coupon with a value equivalent to their payment amount. The added time becomes effectively free when the mobile user redeems the coupon at a participating merchant.

An insight driving many of the local brands is the willingness of increasingly time-pressed Indian consumers to pay for convenience. Travel apps, like Make My Trip, Goibibo, Cleartrip, and Yatra are especially relevant to upwardly mobile urban consumers. The apps are similar to Travelocity or Expedia. Book My Show handles theater and other event ticketing online. The e-commerce brand Hopscotch saves time for young parents by curating brands for children, moms, and home.

REINTERPRETED FOR INDIA

Many Indian entrepreneurs, especially in e-commerce, introduce to India products and services they discovered in other parts of the world. Several Indian entertainment brands distribute existing and original content, including TVF (The Viral Fever), an entertainment channel, and AIB (All India Bakchod), a comedy channel. Hotstar also provides online and mobile programming with some original content.

These brands resemble established entertainment brands such as Netflix and Hulu. The ride-service brand Ola is modeled on Uber. Flipkart is an online marketplace similar to Amazon or Alibaba. Olx and Quikr recall the online auctions of eBay or classified ads of Craigslist. The brand Zomato is similar to Yelp. Big Basket, the grocery brand, combines online ordering and home delivery like Amazon Fresh, but on a larger and more complex scale.

Although useful for a basic understanding, these comparisons to other brands are imperfect, just as describing China’s search engine Baidu as the equivalent of Google, or Tencent as a crossbreed of Facebook and Twitter, does not fully do justice to any of the brands. Indian and Chinese brands resemble their global equivalents in general, but their success depends on being different in ways that are meaningful in their respective local markets. For example, Big Basket has mastered much of the complicated logistics of fresh food home delivery across multiple Indian cities.

There is one important distinction between local Indian and Chinese brands, however. The Indian government may sometimes regulate and even slow the speed at which foreign brands can enter the country, in order to protect local brands and give them a growth head start. But in India, the flow of information over the Internet is not subject to the same restraints as it is in China. Consequently, local Indian brands are more likely to face formidable global competition.

ADVERTISING AND MARKETING

Along with their local market knowledge, the entrepreneurial Indian brands enjoy the advantage of being new and different, although that comes with the related disadvantage: these brands start out unknown and need to quickly raise awareness. Like India’s more entrenched brands, the emerging brands use a mix of traditional and digital media. The tonality of their messages is distinctive, however—usually youthful and even quirky. Some emerging brands first target a narrow digital audience and expand to TV as they increase in scale. The e-commerce furniture and home décor brands Pepperfry and Urban Ladder followed this approach.

All Indian brands over a certain size are by law required to allocate a portion of their profits to corporate social responsibility activities. Well-established multinationals like Hindustan Unilever, or Indian conglomerates like Tata, devote resources to projects that advance the common welfare and also help burnish their brands. The emerging brands, with fewer resources, tend to focus more exclusively on building their businesses, although some, such as Patanjali and Forest Essentials, express a social mission with their products.

Many local Indian brands have effectively challenged the market leaders. They continue to emerge, usually filling new e-commerce niches. Urbanclap is a relatively new online concierge brand for locating products and services. In response to the impact of local entrepreneurial brands, many of India’s conglomerates are increasing their own e-commerce presence. Examples include the Tata Group, Reliance Industries, Aditya Birla Group, and the Mahindra Group, which recently acquired the e-commerce startup Babyoye, a website for new or expectant mothers.


INTRODUCING A NEW BRANDZ™ INDIA FEATURE

This section about emerging entrepreneurial Indian brands inaugurates a new feature of the BrandZ™ Top 50 Most Valuable Indian Brands report. Typically, these brands are privately owned and therefore not eligible for inclusion in the BrandZ™ ranking. They are, however, a significant phenomenon—one that represents the growing appetite of Indian consumers for local brands. WPP India brand experts selected the 25 brands summarized in this section to illustrate how, in just a few years, entrepreneurial Indian brands have\ established a strong presence across India in multiple categories.

BrandZ India Top 50 2016

BrandZ Global 2016 Report Top 50 Report

Top 50 Chart

Top 50 Infographic


Methodology and valuation by Kantar Millward Brown


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