Will rising nationalism undermine global brands?

by Nigel Hollis | September 21, 2016

Today sees the launch of BrandZ™ Top 50 Most Valuable Indian Brands 2016 and just as we saw with the latest Indonesian ranking the results find that the growth of locally-grown brands has outpaced that of global brands with a local presence. Given a widespread rise in nationalism around the world what might the implications be for global brands?

In India specifically, locally-grown Indian brands increased 32 percent in value over the last three years, while global brands with local presence grew by 19 percent. The number of brands of Indian origin in the Top 50 increased from 35 in 2014, to 38 brands in 2016. Local brands have proved that they are capable of producing high quality products and services, while at the same time appealing to Indian tastes and traditions.

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However, the BrandZ™ Top 50 Most Valuable Indian Brands report suggests that an additional influence may be the rise of a new Indian nationalism, expressed as a pride in Indian ingenuity and innovation. Indian jugaad – low cost, intelligent problem solving – has always been respected in India, but this pride may now also be indicated in the desire to choose local brands over their global counterparts.

The BrandZ™ Top 50 Most Valuable Indian Brands report notes that pride in India may be an implicit consideration when purchasing, suggesting,

“A consumer who chooses a local e-commerce brand like Flipkart over Amazon, or the Indian taxi service Ola over Uber, may be expressing pride in Indian technological entrepreneurship…”

The report suggests that the best example of a brand that has benefited from an implicit connection with the new nationalism is Patanjali. In the last 10 years Patanjali has expanded from a narrow focus on Ayurvedic products to a wide range of consumer products. By focusing attention on healthier, natural ingredients founder Baba Ramdev managed to create a brand with unique appeal to Indian consumers and take on well-established multinational brands. 

The trend to growing nationalism is not limited to India, even if the nature of that trend does differ from country to country. The desire to make America great again, Britain’s decision to leave the EU and the result of the recent German elections all indicate a desire to hold true to old cultural values irrespective of the fact that there is no way to wind back the clock. This negative and backward looking mindset is contrasted by the more positive and forward-looking mindset found in countries like India, Indonesia and China. In countries like these the mantra seems to be ’respect the past, embrace the future.’

Whatever the country, global brands will need to examine how they can thrive in a more complex and contradictory world. The BrandZ™ Top 50 Most Valuable Indian Brands report suggests that given the diversity of the Indian consumer global brands might still be able to appeal across the cultural divides within India but I wonder if that strategy is likely to be effective. The imperative to be local and act local seems to be becoming ever stronger. But what do you think? Please share your thoughts.

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  1. Peter A Denega, September 25, 2016

    Nation state governments will and have always used nationalism, The international aspects are more difficult to discern culturally/historically east & west. Who can blame China for allowing Chinese centric companies from developing and gaining traction Baidu Alibaba etc although this is now stifling competition in the home markets. India is having a problem developing Indian centric companies Flipkart Snapdeal will be stunted by Alexa IoT and Siri (in my ear) to cliff edge danger of becoming a North American commerce satrap. The big picture (defence) Japan is not a satrap India IMO should bite back. 

    The west can build inspirational brands in China but one international incident (island runways) and the brand will be mauled for life. Partnership using a Chinese brand is the better option.

  2. Ed C, September 22, 2016
    One corollary of this that I've often thought about is "if all else equal, I'll buy local". How often are all things equal though? Often times global brands are cheaper/better/meaningful/different. But if the gap in price/quality is shrinking between the giant (often global) brands and local brands, I can see the trend skewing more local continuing. Global brands could embrace the trend creating local entities, stamping the "made in the USA (or whatever the local country is), to hopefully give the push to buy that brand, if all else equal.

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