What’s holding back Indian brands from going global?

Are Indian entrepreneurs lazy, risk-averse, unimaginative, tight-fisted, control-freaks? Well, it would seem so, going by the current debate on why India, the world’s fourth-largest economy on track to be the third-largest soon, doesn’t have any global consumer brands to speak of.

Addressing an event organized by industry body Ficci (Federation of Indian Chambers of Commerce and Industry) in August, commerce and industry minister Piyush Goyal held the lack of ambition among Indian entrepreneurs as the factor for the country’s inability to produce brands with global recall. It’s a lament he’s repeated from several public platforms subsequently.

Some of the Indian corporate leaders, such as Uday Kotak and Harsh Goenka, have echoed his sentiment. Indian entrepreneurs hide behind protectionism, and are content to serve the 1.4 billion domestic consumer market, Kotak said in an interview with Mint in April. Goenka spoke of the reluctance among his peers to invest in R&D, marketing and branding, as well as the inability to build products that matched global quality standards.

In a somewhat related piece published in Hindustan Times on 13 October, management consulting firm BCG’s India chairman Janmejaya Sinha and managing director Vikram Bhalla argued that India’s “superman entrepreneurs" who have largely been driving the India growth story have failed to create real-scale global sized companies because of their biases and inhibitions with regards to delegating power, and making space for vision from and autonomy for anyone outside their circle of “loyal order takers".

Scaling brand

At a time when India is making waves on both the geopolitical and economic fronts, it is a fair question to ask why corporate India has failed to showcase any popular brands on global shelves. Forget the brick-and-mortar era consumer brands, India, a supposed tech power, doesn’t have any new-age, global digital consumer brands either. Even if one ignores the all-pervading names such as Facebook, Twitter, Google and Apple that originate from the much-developed part of the world, there are brands like Samsung, LG, Haier, Oppo, Vivo, Huawei and BYD from India’s neighbourhood that have come to shine globally.

To be sure, the Tatas, M&M, Adani and Infosys are some of the Indian corporations that enjoy a certain global recognition, but these are not universally recognized consumer brands.

The absence of Indian brands in the global fast-moving consumer goods or white goods categories is somewhat understandable. By the time Indian policy allowed the homegrown enterprises to build their arsenal to compete, the battle for supremacy in these categories was already over. Unilever, P&G, Nestle, L’Oreal, Reckitt and Johnson & Johnson, among others, were so well-entrenched in terms of their diverse product portfolio, extensive global supply chains and sales and marketing network, not to forget their hold over the consumer psyche, that homegrown companies couldn’t even hope to compete with them globally. On the contrary, brands from companies such as Coca-Cola and Pepsi were aspirational for Indians well before they entered the market, thus making their ride easier in the country.

Untapped potential

There were many redoubtable Indian entrepreneurs who built strong brands, such as Onida, Allwyn, Kelvinator and BPL, in the consumer durables market, but most among them couldn’t withstand the competition from their larger global counterparts, such as Whirlpool, Panasonic, Electrolux, LG and Samsung that had built reach and scale that couldn’t be replicated quickly.

Resources, scale, sales and marketing muscle, however, are not the only factors that helped these brands build a global reach and recall. They also commanded consumer trust based on the consistent quality of their products.

Whether quality, trust, and similar intangible attributes are inherently rooted in the cultural environment of these brands or are values consciously constructed and fostered using tools such as policy, regulation, and tight governance models is not a difficult question to answer.

Eric Schmidt pointed to this in 2013, specifically in the context of India’s potential and its probable limitations to become a tech superpower. In an interview with McKinsey, the former CEO and chairman of Google had said that Indian entrepreneurs had the potential to build the next Google, provided the country played its “cards right". For him, it was not a question of talent or vision of Indian entrepreneurs. “It’s a question of the way in which the system is run, the regulations, the way capital is formed and so forth," he had said.

Nearly 12 years later, Schmidt’s prediction of the next big global tech innovation coming from India remains far from being a reality. Forget a platform like Google; India has not even been able to get a low-hanging fruit like TikTok.

Strategic vision

As Schmidt pointed out, the entrepreneurial spirit of a nation is not solely about individual talent. Even in the dyed-in-the-wool capitalist markets of the US and Europe, large brands emerged in the wake of a strategic political vision that steered the Industrial Revolution in the 19th and 20th centuries. A more recent example from India’s neighbourhood is that of the Korean chaebols. These corporations were originally driven by political policies aimed at promoting economic development following the Korean War. Even though China’s growth model differs from India’s, the transformation of its consumer brands, which were previously perceived as shoddy and cheap, into innovative and efficient ones is also an outcome of a deliberately crafted political foresight.

To be sure, policy push and political vision are no substitutes for entrepreneurial ambition, the appetite for risk, and sound ethical practices. The two need to work in tandem. Much as Indian entrepreneurs need to be ready to launch themselves into the choppy global waters with courage and abandon, the government also needs to address the qualms about Brand India. Besides fixing the much talked about Indian labour laws, funding gaps, bureaucratic hurdles and systemic corruption, the public perception that any collaboration between politics and enterprises is fundamentally unholy needs redressal, too. It’s a shift that requires a meaningful engagement among all stakeholders.

Mr Goyal has done well to kickstart that conversation.

Archna Shukla is former National Corporate Editor, Mint.