Indian brands fall short

18 April 2011

NEW DELHI: Major Indian brand owners are still struggling to gain international recognition, a study has argued.

Consultancy Penn Schoen Berland polled 600 executives in the 21-74 year old demographic, who followed more than one source of financial media, and worked for a firm with an overseas presence.

Contributors came from China, France, Germany, Indonesia, Japan, Malaysia, Singapore and South Korea, the US and UK, and rated 61 Indian organisations in terms of awareness and overall standing.

Tata Group, a conglomerate active in sectors from retail to consultancy, led the charts, with chairman Ratan Tata also the best-known business leader.

Although Tata has acquired several foreign brands, such as Korean automaker Daewoo, levels of respect fall somewhat behind its fiscal muscle.

"The Koreans didn't want to be taken over by an Indian company," R Gopalakrishnan, a director at Tata Sons, said.

Similarly, the purchase of British carmaker Land Rover cannot be easily translated into overseas success, given current popular perceptions.

"When you buy a Land Rover you don't say that it comes from the land of tigers and snakes," said Gopalakrishnan.

Sun Pharmaceutical Industries was second, having formed an alliance with US counterpart Merck this month in a bid to enhance its global status.

"This joint venture reinforces our strategy of partnering to launch products using our highly innovative delivery technologies around the world," Dilip Shanghvi, chairman, Sun Pharmaceutical Industries, said.

Air India and Jet Airways were third and fourth in the rankings, ahead of TVS Company, which specialises in motorcycles and other "two-wheelers".

The State Bank of India claimed sixth, the Oil and Natural Gas Corporation took seventh, and the Indian Oil Corporation occupied eighth.

Completing the top ten were Axis Bank, recently involved in the roll out of mobile banking services, and Kingfisher Airlines.

In identifying the defining attributes of the premier Indian operators, 54% of respondents from the US, Europe and Asia Pacific mentioned financial performance and cited 49% market performance.

Another 45% referenced brand image, 40% afforded leadership an equal weighting, and 38% prioritised environmental, sustainability and governance credentials.

While Indian firms have made rapid progress in these areas, the study suggested additional measures will be required to create a local Microsoft, General Electric or HSBC.

Indeed, over a quarter of the sample could not spontaneously name a major Indian player, rising to 23% in the US, and 29% in Europe.

Some 18% of the panel reported that Indian corporations have yet to match foreign competitors as they are comparatively new entrants and lack recognition.

"Indian companies and leaders must make brand-building their mission," said Mark Penn, Penn Schoen Berland's chief executive.

"They have come a long way, but they still have a long way to go to make their full mark on global business."

In all, 45% of interviewees agreed the lower cost of materials and labour benefitted Indian rivals, while only 25% believed the country displayed stronger entrepreneurialism than elsewhere.

Data sourced from Financial Times/Penn Schoen Berland; additional content by Warc staff