India 2015: OVERVIEW | Key Themes: Growth
Growth, the new imperative, challenges brands to keep up
Strong economy and Brand Power drive record value increase Growth is the new imperative. As the Indian market became more competitive, seven brands that grew over 20 percent in brand value actually dropped to a lower rank in the BrandZTM Top 50 Most Valuable Indian Brands. And 8 percent of the brands from the 2014 India Top 50 dropped out of the 2015 ranking completely.
Faster rising brands produced a 33 percent year-on-year increase in the 2015 BrandZTM India Top 50 brand value, and raised the ranking cutoff to $403 million from $208 million, in just one year. The 33 percent increase exceeds the growth rate of the Global Top 100 for every year since the launch of the Global BrandZTM rankings a decade ago.
The following recent results add perspective: The 2015 BrandZTM China Top 100 increased 22 percent in brand value; the BrandZTM Global 100 improved a healthy 14 percent in 2015; and the BrandZTM Latam Top 50 declined 4.5 percent in the most recent report. India’s robust economic growth combined with strengthening Brand Power, a BrandZTM measurement of brand equity, made the difference.
Strong brands grew stronger. All but one of the Top 10 brands outperformed the 33 percent rise of the India Top 50 and the Top 10 overall rose 34 percent. At the
same time, the Top 10 grew substantially in all three components of Brand Power, which measures a brand’s ability to grow sales volume and market share.
And in the components of Brand Power – Different (unique or trend setting), Meaningful (meeting needs and inspiring love) and Salient (being top of mind) – the high scores of the BrandZTM India Top
10 improved further. Meaningful grew 9 percent to 134 from 123; Different grew 8 percent to 138 from 128; and Salient grew 24 percent to 143 from 115. An average brand score is 100. In addition:Financial services led growth.
The total brand value of the 13 bank and insurance brands in the BrandZTM India Top 50 rose 49 percent and produced 41 percent of the India Top 50 value.
Category leaders excelled.
These brands exceeded the 33 percent Top 50 growth by 10 percent or more: Automaker Maruti Suzuki, Colgate, Lifebuoy, HDFC Life, and Berger paints.
Legacy brands spiked.
The three Top Risers and their increases were: Union Bank of India (72 percent), personal care brand Lakme (69 percent) and Punjab National Bank (61 percent).
At the same time, brand value grew across all ownership models. The nine State Owned Enterprises (SOEs) in the BrandZ India Top 50 increased 36 percent in brand value, but 26 private brands, both autonomous brands and brands owned by Indian conglomerates, were close behind with a 33 percent brand value increase.
The 15 multinationals (MNCs) trailed with a brand value rise of 26 percent, a strong result but less than the increase of the India Top 50 overall. Three of the four newcomers that entered the India Top 50 this year were private brands and one was an SOE.
BRAND VALUE GROWS ACROSS CATEGORIES
Brand value also grew significantly across categories. When aggregated into six sectors that broadly represent key consumer-facing industries in India, every sector but one grew in brand value by more than 20 percent, led by the 49 percent increase of financial services. These sectors, in the order of the brand value growth they achieved, include: home and personal care (32 percent), auto aftermarket (28 percent), auto (27 percent), telecom providers (21 percent), and food and drinks (10 percent).
Along with the 41 percent financial services contribution to BrandZTM India Top 50 total brand value, the other sectors each contributed 12-to-15 percent, except for auto aftermarket, which contributed less. The relatively large brand value contribution of financial services is consistent across the BRIC markets and characterizes the BrandZTM Global Top 100 as well. The high brand value contribution of auto and FMCG brands, and the absence of technology, are particular to India.
The steady expansion of India’s middle class, and the strong boost in consumer confidence following the elections in May 2014, created the conditions for brand value growth to touch most categories. The fortunes of individual brands, however, depended on their brand building expertise. Although the auto category increased 27 percent in brand value, for example, the six brands in the category experienced varying results. And auto brands dropped an average of 8 places in the ranking.
Two auto brands outperformed the 33 percent brand value rise of the India Top 50. The four-wheeler leader Maruti Suzuki increased a whopping 54 percent in brand value. Hero, a leader in the two- wheeler segment, improved 34 percent in brand value. These brands reinvented themselves by identifying and filling product gaps in the evolving India market. With well-considered segmentation the brands served the needs of first-time buyers, shoppers trading up to premium models as well as those in the vast middle.
INNOVATION AND COMMUNICATION GET RESULTS
The brands that excelled in brand building pursued product innovation and connected with consumers in new ways, often through social media. In many categories brands communicated more effectively with women, appealing to their growing sense of empowerment and their financial independence. One popular detergent campaign questioned whether men should share the laundry chore.
Personal care brands responded to rising consumer expectations about brand benefits and a willingness to pay for those benefits. Positioned as an indulgence, Lakme?, the cosmetic and skin care brand, benefited from this premiumization trend, while it also added salons to reach more recently empowered women. As premiumization touched other categories, the jewelry brand Tanishq also up scaled some of its offering. Leveraging the trend toward greater social responsibility, Lifebuoy, an affordable soap brand, promoted positive hygiene habits, particularly for children.
Regulatory issues may have slowed brand value appreciation of the telecom provider category, which still grew a healthy 21 percent. Expanded Internet use and the availability of low-price mobile handsets should drive future telecom provider brand value growth. Only one category declined in brand value. Motor fuels lost 4 percent in value and brands in the category dropped an average of nine spots in the ranking.
The value of the BrandZTM India Top 50 may not increase one-third in value every year, but with an expanding economy and sophisticated brand building expertise, the value of the India Top 50 should appreciate at a steady pace for the foreseeable future, across an expanding number of product categories and all brand ownership models.
|Financial services leads the India Top 50 in number brands...
With 13 banks and insurance brands in the BrandZTM India Top 50, the financial services category exceeds all categories in number of brands represented.
|... And in brand value contribution...
The 13 financial services brands in the BrandZTM India Top 50 produce the greatest brand value contribution by far, 41 percent.
|... And in brand value percent increase
The financial services brands rose 49 percent in brand value, exceeding the strong 33 percent increase of the BrandZTM India Top 50 overall.