Warc Blog

Communities key to India success

11 December 2013
NEW DELHI: International brands hoping to succeed in India have been advised by the chairman and CEO of the Coca-Cola Company to look beyond capital investment alone and to pay attention to human investment and communities.

Drawing on Coke's experience since it re-joined the Indian market in 1993, Muhtar Kent said Indians have had "a long and painful experience" with foreign businesses exploiting their market without contributing to the wellbeing of the local economy.

This meant companies had to recognise their future is tied to the communities where they operate, he advised in an article for McKinsey, the global management consultancy.

"We learned that although Indian consumers were eager to embrace global brands, they resented any hint of global corporate dominance," he said. "It took us time to understand that small stores, many operated by families out of the front of their homes, were an unappreciated source of economic opportunity."

He said Coca-Cola found that it needed to regard the Indian market as it is rather than as the company wished it to be and, having done so, is now in a position to invest $5bn in its Indian operations until 2020 – by which time it expects India to be one of its top five global markets.

He advised foreign companies to concentrate on a number of key areas – training and recruiting talented workers to reduce turnover attrition rates; sourcing more products from within India to deepen ties to the Indian market; recognising the importance of mobile commerce for young Indians and, above all, understanding that Indian consumers are more likely to buy from small family stores.

As many small stores in India are run by women, Kent pointed to one of Coke's initiatives that helped women entrepreneurs to gain easier access to credit and another that helped rural village stores to connect to the electricity grid.

"We found we could help store owners address [these problems] in ways that helped them, helped their communities, and also helped Coke," he explained.

Data sourced from McKinsey; additional content by Warc staff

 
Envelope
EMAIL UPDATES

Sign up to Warc News – free daily bulletins on brand and market strategy, digital media and innovation



Trial


 

News content feedPrint