HVK Archives: WSJ: Indians Favor Local Brands Over Foreign, Survey Finds
WSJ: Indians Favor Local Brands Over Foreign, Survey Finds - The Indian Express
Posted By HVk Editor (hvk@hindunet.org)
Wed, 9 Oct 1996 07:01:43 -0500 (CDT)
October 9, 1996
Indians Favor Local Brands
Over Foreign, Survey Finds
By FARA WARNER
Staff Reporter of THE WALL STREET JOURNAL
Forget Coke, Jeep and Rolex.
In India, the most recognized brands are homegrown, including favorites
Thums Up soft drinks, Tata automobiles and Titan watches. Moreover, unlike
many of their Asian counterparts, many Indians have yet to acquire an
insatiable thirst for international brands.
That's according to a nationwide survey of 5,122 Indian adults conducted
by Bangalore-based Gallup India Pvt. Ltd., a subsidiary of Gallup
Organization Inc. The study, conducted in March and April, was released on
Tuesday by the Princeton, New Jersey-based polling company.
The survey, which included rural and urban populations, covers issues
ranging from brand recognition and consumer spending to social concerns
such as poverty and women's roles in society in the country of 940 million
people. It covers 144 villages and 84 towns and cities, with 1,600
interviews in urban areas, 1,440 in rural areas, and another 2,000 in the
major cities of Bombay, New Delhi, Calcutta, Madras and Bangalore.
Study Follows China Survey
It follows by a year Gallup's first attempt to gather information about
the world's most populous countries when it talked to more than 3,000
Chinese adults.
The India survey shows that international brands, especially those from
Japan, lag behind local brands on the recognition scale, apart from some
strength in major cities.
But there was hope hidden in the survey results for international brands,
especially those masquerading as locals. Thums Up, with a 51% national
recognition rate, is now owned by Coca-Cola Co. Hindustan Lever, at 39%,
is a unit of the Anglo-Dutch group Unilever and Zee TV, at 34%, is 50%
owned by Star TV, the Asian satellite television subsidiary of News Corp.
"Companies like Hindustan Lever have been around so long they're not
really foreign brands anymore,'' says R.S. Ahluwalia, managing director of
the New Delhi-based advertising agency Arms Communications. For many
years, international brands were kept out of India by protectionism and a
system of licensing regulations that favored local companies.
Domestic Brands Issue Challenge
Mr. Ahluwalia says that international brands still face even greater
challenges in the future as local brands push further into villages. "The
rural market is burgeoning, and international brands will find it hard to
follow where they have no distribution or marketing support,'' he says.
"The local brands are starting to say 'Come fight me in the villages,' and
that's tough on new brands like Procter & Gamble'' Co.
While the dominance of local brands poses a major marketing challenge to
international brands, other financial and social issues are likely to
affect any company trying to do business in India.
Although India has opened up its economy during the past few years,
Indians on the whole aren't content with their way of life, their level of
income or the amount of money they have in the bank, the survey reveals.
With poverty and unemployment considered the most pressing problems facing
the nation, according to the survey, a majority of Indians say they are
dissatisfied with their personal life and concerned about their financial
well-being. Median annual household income is reported at 36,000 rupees
($1,010) in urban areas and just 16,000 rupees nationwide.
Personal Satisfaction Low
The poll found that 51% of Indians rank their personal satisfaction low on
a scale of 0 to 10, with zero being the worst possible life. That compares
with 13% who say they are neutral and 33% who say their quality of life is
closer to 10.
"The vast majority of Indians are still quite an unhappy lot,'' says P.
Dayalan, associate project director for Gallup in India. "While the
economy has opened up, the benefits still haven't trickled down to most
Indians.''
Indians also are worried about their lack of savings. More than half of
Indian households say they have no savings, and the mean level of savings
is only 3,500 rupees nationwide. Indians spend about 40% of their income
on basic needs such as food and shelter, Gallup executives say, compared
with the Chinese, who spend about 20%, allowing for a much higher savings
rate.
When asked what they would do if they had an unexpected windfall of money,
73% of Indians said they would put at least some of it in the family
savings, while 70% said they would use some of it for a child's wedding.
Standard of Living Improving
However, Indians, especially those living in urban areas, do say their
standard of living is improving, with 34% seeing it rising, 27% seeing it
declining and 37% saying it remains the same.
But Gallup executives point out that India suffers from a widening gap
between the affluent, urban middle class, with their cars and savings
accounts, and the still-huge rural population that finds it difficult to
make ends meet.
Figures on how Indians live nationwide compared with their urban
counterparts reveal how wide the gap is. In urban households, 93% have
electricity, 66% private bathrooms and 56% running cold water. Nationwide,
however, only 58% report having electricity in their homes, 25% running
cold water and 34% private bathrooms. (Gallup executives point to one odd
statistic: urban households are more likely to have access to cable
television than running hot water.)
In urban areas, 63% say they are living comfortably, while in rural areas
57% say they find it difficult to get by. Nor have economic reforms over
the past five years had a significant impact on Indians, according to
those surveyed, especially in rural areas.
The federal government also receives low votes of confidence, with 15%
saying New Delhi can be trusted do what is right "almost never,'' and 26%
saying it can be trusted "only some of the time.''
Meanwhile, Indians show an increasing openness to women in the workplace.
While 58% of men and women say they approve of women who want a career,
only 21% disapprove.
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