Post Mortem

Creating global Indian brands: The next frontier

By Nagaland Post | Publish Date: 6/11/2020 12:39:04 PM IST

 As we look to restart the economy and build on India's competitive advantages in the future, it is time for Indian businesses and investors to focus on building Indian brands for the global stage. Despite the issues the pandemic has thrown up, the plethora of investors who have evinced interest in being part of the Indian recovery like in the telecom sector linked companies in India demonstrates that global interest in the Indian consumer market is strong.

The interest is an indication that over the next two decades, the Indian consumer story is one in which businesses will need to partake, not because they want to, but more because they have to. Incidentally, in the context of Indian businesses, the retail sector has attracted significant interest both from domestic and international players. While the platforms for sales in both physical and e-commerce driven retail have seen considerable interest and investments, more attention towards creating Indian retail brands for the global stage is warranted.

India has been a component of the retail export market in the past two decades catering to brands and retailers across the more developed economies, especially post-1991 economic liberalisation. In today's world, Indian companies must move up the value chain and create "Indian brands" that can be exported to the world and, more importantly, can cater to the large Indian consumer market. Thus, Indian brands are the next frontier for entrepreneurs and investors (both international and domestic ones) alike. As the platforms that can facilitate the sales is a space that has already been consolidated with large players bestowed with deep pockets, the next frontier of opportunity lies in creating brands that can create sustainable economic moats, strong cash flow profiles and significant pricing power to serve the needs of the Indian consumer and eventually the global consumer.

Primarily, investors must focus on businesses that can fulfil consumers' preferences and hence generate value by tapping into the 'discretionary consumer' spending needs in the years to come. The ability to operate and finance businesses that can create brands that deliver exceptional consumer value while allowing the brand significant pricing power will be the key going forward. The investment dollars that India has seen and investments that have captured the imagination are those that have, in general, built the market infrastructure for facilitating the flow of goods, data and information.

Now is the time to build and scale-up brands in the "discretionary-consumption" space in India. It must be underscored that in an economy of the size of India, there are brands that have delivered value in the "discretionary-consumption" space such as Titan. The key is that going forward, more and more brands in the "discretionary-consumption" space will be the value creators and return generators. One of the most critical components of understanding the discretionary-consumption play in India is that there are "markets within a market". The crucial element for brand building businesses will be to create a product that satisfies consumer needs to the extent that allows the brand to compete in "blue oceans" within the market where margins are healthy and yet volumes are significant.

Fundamentally, for brands to succeed in the "discretionary-consumption" space in India, value delivery through product quality will be vital and a strategy built around charging lower prices isn't sustainable. For the next generation brands to be built, it is also important to realise that India as a market might require brands not just to establish the product branding but also create the retail infrastructure. While vertical integration is a concept utilised by brands globally, the significance in an Indian context cannot be overstated. Mainly, differentiated products in the discretionary consumption space will need varied retail infrastructure and strategies. Therefore, brands will have to utilise an omnichannel approach to deliver returns and results.

While the demand recovery from the Corona-induced lockdown will perhaps be 'U Shaped', for investors with long-term "expectational" horizon, a strategy of brand building or platforms to accumulate attractive brands will have to be utilised effectively. Short-term market and economic cycles must be looked at in the perspective of structuring attractive business opportunities in the long run.

(IANS)

Taponeel Mukherjee 

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

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