India Background | Market Structure
In a distinctly Indian phenomenon, family conglomerates own a significant number of India’s leading brands across most categories, from industrial products to FMCG.
Most of the Indian conglomerates were formed over 65 years ago, before the establishment of India as an independent nation, during the period of British rule, at a time when India’s middle class first expanded and local entrepreneurs found ways to align with the government’s nation-building agenda.
When conglomerates worldwide often failed to produce productive synergies among their many holdings, many Indian family conglomerates expanded their holdings and built master brands that confer authority across disparate categories while accruing economies of scale. They've also succeeded where many family businesses fail, transmitting a sense of mission and entrepreneurialism to successive generations.
There are around 40 prominent Indian family conglomerates. The largest include: Adani Group, Aditya Birla Group, Bharti Enterprises, Essar Group, Godrej Industries, Mahindra Group, O.P. Jindal Group, Reliance-ADA Group, Reliance Industries, Sahara Group, and Tata Group.
Indian family conglomerates overall score significantly higher than MNCs (Multinational Corporations) in brand power, the BrandZ measurement of brand equity and a brand's ability to drive market share. Factors driving this result include:
Dynasty Prior to British rule, India experienced centuries of dynastic leadership. These family conglomerates adapted India’s traditional governance structure and applied it to commerce. Over time, they leveraged their privilege, knowledge of the system, and access.
Family Family is the primary social unit in India, perhaps more than in many other nations. Until recently, individual prerogatives were secondary to the needs of the family. The family dynasties match this cultural characteristic.
Trust Trust plays and important role in Indian society. A family name on a product or service assures consumers with promises of quality and reliability even across unrelated categories.
Mission The conglomerates are not building family wealth alone, although they’re often tremendously wealthy. They’re also building businesses to serve a nation. This mission provides guidance and continuity for successive generations.
Local Roots Local knowledge and connections, important factors for success in any market, are especially critical in India because of complexity and diversity. Success requires getting the subtleties right.
Professionalism In culture, Indian conglomerates respect tradition and family; in operations, they adopt the most up-to-date, global best practices. This duality is part of what makes them successful and particularly Indian.