MUMBAI: Changes in the Indian consumer landscape, including increased broadband penetration, a younger demographic growing in economic strength, and private label brands are threatening the hold of big consumer brands on the country.
This is according to a report by Euromonitor, reported by Livemint, which found that between 2012 and 2017, eight of the country’s top 12 brands have ceded as many as two percentage points to new brands in home care, packaged foods and beverage categories.
The research firm named the brands ceding share as Horlicks, Tata Tea, Thums Up, Amul, Britannia, Mother Dairy, Brooke Bond, and Surf.
Traditionally dominant international carbonated drinks brands such as the ubiquitous duo of Pepsi and Coca-Cola are losing ground to regional brands such as Bovonto and Vibro. Meanwhile, ravenous young brands such as Patanjali Ayurved are also moving dangerously in this space.
A spokesperson for Coca-Cola India noted the evolving market, and stressed “the need for brands to invest in their innovation pipeline”.
Meanwhile, laundry brands are facing competition from less visible local brands, “where small unorganised players still account for almost one third of sales,” the Euromonitor team told Livemint in an email.
Among CPG brands, also, the rise of new players has affected big brands’ pricing power. But the challenge for incumbents is often the size of the organisation, coupled with lower barriers to entry for smaller players.
“We have seen this happen globally. It must be happening here as well. One of the reasons is the digital phenomena. Many platforms are offering an opportunity to smaller brands to build a brand and for distribution. These are no longer entry barriers,” said BCG’s Abheek Singhi, managing director and senior partner at the group’s consumer practice in Asia-Pacific.
India’s changing landscape has coincided with the rise of Patanjali, which the consultant Satish Pai wrote about in an essay for the Admap Prize last year. Pai argued that the brand used below-the-line techniques including its own e-commerce site and the fame of its mercurial owner Baba Ramdev to amplify its message over social media.
Sourced from Euromonitor (via Livemint), Admap; additional content by WARC staff