Entrepreneurism and innovation drive rising market competition

Top 50 rises 30 percent in value over three years, and dips slightly

Indian entrepreneurism and innovation, factors which produced the strongest GDP growth of any major industrialized economy, also drove a rise in local Indian brands. The number of brands of Indian origin increased to 38 in the BrandZ™ Top 50 Most Valuable Indian Brands 2016, up from 35 in 2014.

This shift happened as the BrandZ™ Indian Top 50 reached $90.5 billion in value, a 30 percent gain over three years. Indian brands increased 32 percent in value during that period, while foreign brands grew only 19 percent. The growth rate eased a bit, with a modest dip of 2 percent.

The 2 percent adjustment is primarily attributable to state-owned banks, which declined 33 percent in brand value because of loan performance difficulties. With the same state-owned banks removed from the 2015 and 2016 rankings, the value of the India BrandZ™ Top 50 actually rose 2 percent year-on-year.

The 58 percent of brands in the BrandZ™ Top 50 that increased in value grew by an average of 13 percent. Only about a third of the brands declined in value, by an average of 18 percent. Brands that increased in value maintained or grew their scores in two key BrandZ™ measurements of brand equity: Meaningful (meeting the consumer’s needs) and Different (being distinctive or trendsetting). In addition:

  • Following a 39 percent brand value increase a year ago, Kotak Mahindra Bank, a private sector brand, again improved 39 percent in brand value, making it the fastest riser in the 2016 India BrandZ™ Top 50.
  • Another private sector brand, HDFC Bank, retained the number 1 position in the rankings, increasing 15 percent in brand value on top of a rise of 33 percent a year ago.
  • The category value contribution to the India Top 50 shifted away from financial services and telecom providers, which declined 10 percent and 9 percent in value, respectively, while autos and consumer goods experienced increases of 8 percent and 6 percent, respectively.

These results occurred during a period of 7.6 percent GDP growth. But robust economic expansion only partly explains the story, which opened brand opportunities and challenges that are in some ways distinctively Indian.


Consumers have become well informed and sophisticated. Brand choice has expanded exponentially in a short period of time because of the improved quality of local Indian products and the market entrance of more global brands. Greater choice has weakened loyalty.

In a break with the past, consumers are more likely to look for products on promotion, while previously they would simply trade down to gain a more affordable price. Indian consumers are willing to pay a premium for a product or service when they believe it is justified. However, the premiumization trend, ongoing for several years, eased slightly because of slower FMCG sales.

With growing self-confidence, Indian consumers changed not only how they buy, but also what they buy. They faced the future with openness, welcoming the global brands entering India. At the same time, they preserved the past, embracing Indian brands with products inspired by a 5,000-year-old culture.

Some of these products are Ayurvedic and resonate with India’s spiritual heritage. Others contain ingredients that appeal especially to the Indian palate. This “Indian-ness” or provenance can be an added benefit, but generally these factors are not determinative in the buying decision. Ultimately, Indian consumers seek quality products at an affordable price.


These trends cut across geography (urban and rural) and demographics (young and old). Although significant poverty remains in India’s 600,000 villages, the income gap between urban and rural Indians is narrowing for many reasons, including government programs that reduce poverty, support farmers, and help expand the service economy by adding more jobs.

At the same time, wide Internet access, facilitated by mobile phones, means that urban and rural people have similar access to information, including brands, and they share similar aspirations. Urban-rural seems less like a divide and more like a continuum. The income gap is wide but narrowing. The mindset gap has almost disappeared, although rural Indians remain more traditional in outlook.

But even in urban India, young people remain more conservative than young people in the West. While they push for greater gender equality in the workplace and for individual autonomy in choosing romantic partners, young Indians also are respectful of long-time traditions and are more inclined to be in dialogue with their parents rather than in conflict. Influence works both ways, and attitudes of younger Indians are nudging the older generations toward progressive views.


Brands are responding to all of these trends. Ads sometimes take on social issues such as gender equality, typically presenting a progressive point of view while navigating a sensitive issue with humor. Meanwhile, marketing communication is increasingly digital, although India is one of the few major media markets where strong growth of traditional media continues.

Multinationals and the brands of major Indian conglomerates face new competition as entrepreneurial Indian brands rapidly emerge. Sometimes these brands adapt global ideas; other times they introduce products that are essentially Indian. In contrast to multinationals, which usually pursue national distribution, certain Indian brands find sufficient scale by focusing on just one or two states, which works in India, where the population of the largest state exceeds that of Brazil.

More Indian brands are emerging in part because the Indian entrepreneurs are able to identify key insights about Indian market needs and build relevant businesses. These young entrepreneurs have a greater tolerance for risk than their parent’s generation, and they also have greater access to investment capital. And, because of the e-commerce nature of many of the brands they are creating, their capital requirements are relatively low.


These trends unfolded in a dynamic market where consumers remained optimistic, but maybe not quite as optimistic as when they voted in the Bharatiya Janata Party and Prime Minister Narendra Modi two years ago. Promises made have met two seemingly untamable forces: government bureaucracies and the monsoons.

However, the government advanced several important measures designed to make it easier for foreign brands to do business in India. New rules permit 100 percent foreign investment in defense and aviation companies and liberalize ownership in the pharmaceuticals sector. The government also relaxed local sourcing regulations for retailers that primarily sell a single brand.

These changes are expected to attract more Foreign Direct Investment. The government also took important initial steps to make taxation simpler and more equitable, when the upper house of India’s parliament voted to replace a labyrinth of national, state, and local taxes with a single levy, the Goods and Services Tax (GST).

Finally, the government’s promotion of Indian identity has evoked national pride, but it has also challenged India, the world’s largest democracy, to balance the prerogatives of the Hindu majority with the rights of the 20 percent of the population that practice other faiths in this diverse country of over 1.3 billion people.

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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