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Much More Than David Vs Goliath
If global giants have deep pockets and access to formidable technology, Indian entrepreneurs often do not hesitate to flaunt their Indian identity and take pot shots at their foreign rivals
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Take the fable of David versus Goliath. Add a healthy dose of nationalism. Shake it with chutzpah. In India, you will get the ever popular, almost soap like churning and frothing at the marketplace that is sometimes called desi versus Foreign. Circa 2016, if you are a Flipkart fan, then there is no doubt that Jeff Bezos of Amazon is the Goliath pitted against two Davids — Sachin and Binny Bansal. For Jeff Bezos, Sachin and Binny Bansal are in the mould of pesky and nimble irritants standing in his way, as he plans and plots an “amazing” Amazon conquest of the $20-billion e commerce market in India. He has already committed more than $5 billion to finance the invasion and conquest. His company Amazon has the ruthlessness, the deep pockets and the latest technology to sweep aside Sachin and Binny Bansal. But they are no roll overs. It is going to be a fascinating battle to watch between a set of Indian entrepreneurs with their homegrown brand Flipkart pitted against a global heavyweight.
Technology is creating many new disruptions, opportunities and battlefields. Another fascinating one to watch is the one between homegrown Ola and another global heavyweight Uber. The 40-year-old global CEO and co-promoter of Uber Travis Kalanick has already become legendary (or notorious) for his predatory ways. Now he is determined to dominated the app-based taxi market in India with the help of a bulging cash chest and access to the latest technology. But again, determined to thwart the Alexander like ambitions of Kalanick is a 30 something IIT graduate-cum-entrepreneur called Bhavish Agarwal, who founded Ola more than five years ago. The on going war between Ola and Uber is as fierce and often as vicious as the one between Flipkart and Amazon. And both have used “nationalism” to hit out at each other.
If global giants have deep pockets and access to formidable technology, Indian entrepreneurs often do not hesitate to flaunt their Indian identity and take pot shots at their foreign rivals. One recent advertisement released by mobile handset maker Micromax is a classic example of deliberately flaunting the desi versus Foreign angle. A bunch of youngsters in the ad refer sneeringly to “angrezipanti” even as they gush about how the Micromax handset offers many Indian languages. This is ironical because Micromax till recently used Hollywood star Hugh Jackman as the brand ambassador to position itself as a global brand. In the Indian handset market, Samsung has been the undisputed leader since the demise of Nokia. Consumers with money to burn don’t even look at Micromax as an option; they have other global brands if they decide to move away from an Apple iPhone, or a Samsung. But full credit to Micromax for not only surviving in this crowded marketplace but also remaining in the top three with a more than 17 per cent market share. The reason is: cheaper handsets. In the ongoing war between Indian entrepreneurs and global heavyweights, price is a weapon that the homegrown warriors frequently deploy.
But one unusual Indian entrepreneur, who has deployed both national identity and price as devastating weapons against global giants like HUL, Nestle, Colgate and P&G, is Baba Ramdev. Known for popularising Yoga and the debated utility of Ayurvedic products, he has transformed Patanjali into one of the most formidable brands in the FMCG market. So devastating has been the impact of the sudden rise and rise of Patanjali that global companies now routinely extol the virtues of traditional Indian ingredients like neem, amla and even charcoal, while peddling their brands! No one seems to know how far the Patanjali phenomenon can go. After all, home grown brands like Nirma and Chik have in the past jolted the global heavyweights. But their success hasn’t really been enduring.
One advantage the current crop of Indian entrepreneurs compared to their predecessors a decade or two ago is access to global capital. Airtel and HDFC are powerful and successful Indian brands. But most of their equity is held by foreign institutional investors. To that extent, global movement of capital has eroded the distinction between desi and Foreign. But only to an extent.
In this smorgasbord of desi versus Foreign, even friends and partners can become deadly rivals. The latest example is the no holds barred battle for market leadership between erstwhile partners. Ever since they parted ways in 2011, Honda has made no secret of its ambition to dislodge Hero as the number one player in the Indian two- wheeler market.
Honda had one overwhelming advantage: technology. It used this weapon to keep launching state-of-the-art scooters at a blistering pace. Much to the horror of Hero, which completely dominated the motorcycle segment, urban Indian consumers started preferring smart scooters. By late 2015, the gap between monthly sales of Hero and Honda had narrowed so drastically that many pundits reckoned 2016 to be the year when Honda would dethrone Hero. But Hero seems to have weathered the storm, invested heavily in R&D facilities and is now far ahead of Honda. There were two such cases in the past: Subhash Chandra of Zee versus Star Network of Rupert Murdoch, who became bitter rivals after being partners for some years; and Godrej versus P&G, who turned from partners to rivals. Do note, both Zee and Godrej have survived the global onslaught.
Of course, not every Indian entrepreneur or homegrown brand can survive and thrive. Some will inevitably give up and cash out; or even face away like BPL and Onida did from the consumer electronics market under the onslaught of LG and Samsung. But it is a tribute to the stubborn tenacity of Indian entrepreneurs that both BPL and Onida want to stage a comeback. For us watching from the sidelines, it is fascinating to witness the feints, the skirmishes and the assaults. Let the wars continue!