Independence Day is incomplete without celebrating brands that are truly Indian at heart. Samit Sinha pens down the success stories for three such brands for BrandWagon readers — Ghari detergent, Vini Cosmetics and Arun Icecreams — and what makes these brands hold their own in the face of MNCs.
Though India has been an independent nation for 70 years; up until 1991, when near insolvency led India to open up its economy, most product categories were represented by just a handful of players with little competition from the organised sector and limited choices for Indian consumers. It is a glaring truth that even 26 years since then, India is yet to establish its home-grown brand in the global market. But that should not take any credit away from the fact that during this period a few home-grown brands have fought back against intense competition from global brands in the Indian market and won convincingly. These brands have also demonstrated longevity at the top. Arun Icecreams, Ghari (or sometimes confusingly spelt as Ghadi) detergent and Vini Cosmetics’ Fogg deodorant are three examples that are worthy of note.
Founded in 1970, with an initial capital of just Rs 13,000, the turnover in the first year of its push-carts based selling model was slightly over one lakh rupees, which by 1991 reached Rs 3 crore in sales. Today, the Chennai-headquartered Hatsun Agro Products, the company behind Arun, riding on the back of the tremendous success of the ice cream business, is now India’s largest private dairy, earning revenues in excess of Rs 4,000 crore.
Not just in the face of competition from giant cooperatives like Amul and Mother Dairy, but also a formidable multinational like Unilever. However, despite being a household name in Tamil Nadu and neighbouring states, very few people in the rest of India have even heard of Arun Icecreams!
When Ghari was launched in 1987 by the Kanpur-based Mahadeo Soap Industries, Nirma — a home-grown brand out of Ahmedabad was already giving Hindustan Unilever’s (then Hindustan Lever) detergent brand Surf a stiff fight, forcing the latter to launch Wheel. By 2005, when Mahadeo Soap Industries changed its name to Rohit Surfactants, the market had become much more competitive. Not only was there an existing local challenger to Unilever, but there were also other strong multinational players — P&G and Henkel — in the fray. Today, Ghari is the market leader in India’s roughly Rs 13,000 crore detergent market.
Like the previous example, Ghari too, while enjoying a massive regional dominance and despite being an overall market leader, has its footprint centered in Uttar Pradesh and is largely confined to the Hindi heartland.
Of the three, Vini Cosmetics is the newest. Though only spending six years in the market, its founder Darshan Patel had earlier co-founded the hugely successful Paras Pharma, spawning a slew of popular brands such as Itch Guard, Moov, Krack, D-Cold, Livon and Set Wet. After exiting Paras in 2009, Patel set up Vini, launching the deodorant brand Fogg in 2011; in the process toppling the market leader, Hindustan Unilever’s Axe.
While there are commonalities in all the above three cases, unlike Arun and Ghari, Fogg went on to become a truly national brand in a short span of time.
What makes these three brands tick?
Value for money
This point, though seemingly obvious, cannot be overemphasised for a country such as India. It remains the most important consideration for the largest chunk of India’s consumers. A simple way of looking at India’s consumer segments across categories provides a useful perspective. While the relative proportions may vary from category to category, principles of this broad segmentation apply across.
i. Those who buy the cheapest: At the very bottom of the pyramid, as a percentage of India’s population, they may account for roughly a third.
ii. Those who buy the best: A tiny sliver at the top of the pyramid, comprising the elite and the affluent. They represent less than 5% of India’s population, but have large disposable incomes and purchasing power equivalent to their international counterparts.
iii. Those in the middle: Comprising strivers and aspirants, it is by far the largest chunk. While they cannot afford the best, they do not mind paying a small premium for hygiene level quality or a genuinely tangible benefit.
iv. Those who buy the best: A tiny sliver at the top of the pyramid, comprising the elite and the affluent. They represent less than 5% of India’s population, but have large disposable incomes and purchasing power equivalent to their international counterparts.
v. Those in the middle: Comprising strivers and aspirants, it is by far the largest chunk. While they cannot afford the best, they do not mind paying a small premium for hygiene level quality or a genuinely tangible benefit.
While the term value for money has become somewhat of a cliché and is often stretched beyond its original meaning, it should be understood as the antithesis of premium brands that come replete with intangible (social and psychological) benefits. It does not necessarily imply low pricing, but it does indicate a rational equilibrium between what one gets and what one pays — either similar benefits for lower price or greater benefits for similar price. Value for money is a key proposition of successful Indian brands: Arun and Ghari by offering a cheaper alternative for an offering of comparable quality, and Fogg by offering a relevant functional benefit (of a longer lasting product) with price parity.
The Indian success stories in recent times have been of owner-run, owner-driven enterprises — a factor that has undoubtedly contributed greatly to their achievement. There are certain advantages in an entrepreneur-run company, especially when compared to large multinational organisations.
*Higher propensity to take risks
*Lower cost of operations
*A simple, commonsensical approach to marketing
*A native understanding of the local ecosystem
Being born in India and with firm roots in the local ethos, these brands connect more organically with Indian consumers. These brands instinctively communicate a certain reassuring familiarity that makes an average Indian feel more comfortable as against more sophisticated multinational offerings. This is especially pertinent in product categories that intrinsically do not represent badge value. Again Fogg is somewhat of an exception here. Unlike Arun or Ghari, it came up with an innovation that established a new and pertinent value for money equation. It used a propellant-free delivery system supporting the proposition of ‘no gas, only perfume’ to disrupt the market based on the insight that middle-class Indians use deodorants as a perfume substitute and not necessarily as a hygiene product to mask body odour.
Author is Managing Partner, Alchemist Brand Consulting