June 20, 2012
One tall macchiato please. Who would’ve thought? Starbucks’ imminent arrival is a milestone in the story of economic liberalisation in India — a bit like when MTV burst in to our worlds in the early 90s. Equally, it’s a giant step for Starbucks, a brand that has emerged as one of the most culture defining icons of the 21st century.
For all the talk of its promise and potential, India remains a challenging market for western brands — even multinationals like Nike, Coke and McDonald’s. We’ve seen these iconic global brands struggle to find their relevance in India. But nothing can stop them from growing exponentially once they’ve found their rhythm because through their products they’ve ideologically delivered powerful messages of change, opportunity and self-expression.These are messages that will resonate strongly with New India — aka Dhoni’s India.
When “but we’re Reebok” doesn’t really mean anything, the onus to adapt and invent is on the multinational.The result? Reebok’s billion-dollar investment in the creation of a $1 shoe and the development of a retail mechanism that will take the product to the villages. Reebok says that the goal of the project, is not to maximise profits but to “tackle social issues” by creating jobs.This investment is likely to help Reebok establish a strong foothold in a big market.
The cheapest car, the cheapest tablet and now the cheapest pair of running shoes.
This is a world of tighter economics and the emphasis is actually on creating products and services that do more, and are better, rather than taking a passive stance.The CEO of Nokia India, D. Shivakumar jokes, “merely thinking of growth happening in emerging markets won’t help a multinational grow in those regions.” In 2003, the Nokia 1100 was one of the first such innovations — an India- centric product adaptation that instantly won over consumers in some of the most remote parts of the country. Whilst Nokia continues to lose market share and cuts jobs in the west, it has also cleverly built itself a massive new market (with an Apple-like following) in many parts of rural India. In this market, it’s been particularly interesting to follow Nokia’s acquisition of Obopay in India and the subsequent launch of Nokia Money. It’s a service that works with basic feature phones to allow monetary transactions like mobile top-ups and payment of utility bills, without the necessity of having a bank account.They say it could soon replace plastic or even cash. Nokia Money gives consumers a real insight into the investment Nokia makes in this market and the ideological role it can play in people’s lives.
Brand led innovations like the McAloo Tikki Burger tell the greater McDonald’s India story. McAloo isn’t just a delicious vegetarian menu item. It’s one of a series of purposeful adaptations that allows the brand to challenge Shiv Sagars, Udipis and Kamats across the country. McDonald’s reports that about 70% of its menu has been Indian-ised (internationally, roughly about 30% of the menu is local and 70% is standard). For all the criticism it evokes as a symbol of 20th century consumerism, McDonalds’ ability to provide cheap and cheerful dining experiences for families (“McDonald’s Family Restaurant”) is unrivalled and truly a mark of one of the world’s most loved brands.
Howard Schultz, Starbucks’ CEO, obviously gets all this. He says regarding the Indian market, “No one should assume that our success elsewhere in the world will give us success here.We have to earn it.”
People want to participate in the Starbucks India experiment. Even the Washington Post rolled out a list of localized item suggestions,which includes an authentic masala chai, south Indian filtered coffee and packaged coconut water. There are numerous suggestions regarding locations — Gateway of India and India Gate being the unanimous crowdsourced winners. It’s significant that a coffee company from Seattle has such a powerful impact on people that live so far away, across the world.
This experiment has far reaching implications on many socio-cultural aspects of Indian society as we, together with multinationals like Starbucks, shape their role in our worlds. It’s empowering and heartening to see a dialogue, a genuine give and take between the consumer and the multinational as we move forward towards defining the idea of New India.
Tina is a Mumbai-based brand strategist. Having first worked at Wolff Olins in New York and subsequently at Saffron Consultants in Mumbai, she’s found the Indian market breaks conventional branding models and philosophies. So she investigates the changing role of brand, product design and innovation in 21st century India and the social and cultural influences they bring to people1s lives.