K V Rao, Managing Partner, Idee Nouvelle, Singapore

“Indian products are present under global brand names, but as contract manufactured products. It shows that we need to transcend and create brands out of products…I cannot see why an Indian brand cannot address the global market. All around the world, there is an ‘India fever’…it is now a great time to enter the fray.”

KV Rao, Managing Partner of Idee Nouvelle, a Singapore-based consulting company that offers a suite of services to companies to support their growth and overseas expansion, has developed and managed businesses globally in over 40 countries. He has over 23 years of senior management experience in leading enterprises in the FMCG, healthcare, biotech, infocomm, and international trade sectors.

Prior to establishing Idee Nouvelle, Rao was Director at International Enterprise Singapore (formerly Trade Development Board of Singapore), where he led the capability development initiatives of the Board to help local enterprises to internationalise. He has a background in building global business in the areas of pharmaceuticals, bulk actives and healthcare business originating from Asia. Rao holds a Masters in International Business from the Indian Institute of Foreign Trade, New Delhi, and is a permanent resident of Singapore.

Idee Nouvelle caters to clients come from traditional to new growth sectors, with a focus on adding value to western companies looking at Asia expansion, and Asian companies targeting global markets. With an experienced panel of partners from across the world, it provides strategy, advises, and assists in implementation. In conversation with exchange4media’s Gokul Krishnamurthy, Rao speaks about the opportunities and challenges facing Indian brands in their quest to go global. Excerpts:

Q. Even in the Indian market we do not have potent brands to take on global brands that have Indianised themselves to cater to the huge local market...

It is not because Indian brands are weak. It is all about size. Global mathematics is different from Indian financial arithmetic. A transnational corporation will be willing to put in the necessary inputs.

Agro-related products and brands are the first that come to mind. A lot of food production is done organically, which is unique to India. Branded fresh produce has immense potential. I’d personally love to see a globally recognised brand produce of Indian mangoes. Another segment is the engineering and product design space. This includes automobiles, watches (which has already begun), and fashion jewellery. These are domains where a lot of artistic inputs can be combined with technology to take on the global markets.

Post abolition of quotas, consumer goods should also do well internationally, including the garment industry. Then, of course, there is the services sector that India has humongous potential in. There is a lot of credit due to the IT leaders and brands, which have been brand ambassadors in a sense -- the top-of-mind when you say India is IT. I wish it would translate into other products and segments.

Globalisation of a brand is a very punishing process. The chances to re-engineer are very low. While research in the domestic market is easily affordable, a new global market can be very challenging. Another challenge is to get the mix right, and to get a product, which is executed in line with what you have conceived. There needs to be rigor in execution. Besides, there is the imagery that a global brand delivers, the trust that it never fails you. The obsession with quality is often the differentiation.

The Japanese went through the same learning curve. Once, they were known as cheap products, low quality products. Today, they are recognised as the best quality products – thanks to sustained quality consciousness.

The Indian advertising industry has evolved a lot. There is tremendous capability. It is only a matter of time before a lot of the work in the creative space becomes an outsourced model – from artwork to layouts and more.

Another advantage India has is that a lot of this business comes, especially initially, from people contact. With a large expatriate population across the world, the starting point for the activity becomes easier. Singapore itself has positioned itself as a trans-Asia media and communication hub. A lot of collaborations are happening in the space and it is set to grow. We are likely to see a lot of joint projects between India and Singapore.

We are even hearing about the possibility of media planning done in the Indian market, for other markets, including markets as big as China. Language seems to be the only bottleneck. The possibilities, as I said, are huge.

In the case of Singapore, it is always infrastructure that comes first. Somehow in India, industry comes first and infrastructure limps up later. The obsession with quality and services, the rigor, is higher in Singapore. In Singapore, the entire system ensures that what is conceived is executed – there are no process losses. Productivity is very high and there is a lot of innovation.

In India, the distribution is very evolved compared to many Asian markets. The Indian market offers the lowest cost to reach the consumer among Asian markets. All the other Asian markets are also very different from each other.

Clearly, there are two kinds of brands in the Asia Pac region – international brands, and regional brands that have a presence in around 10 countries of the region. They both co-exist.

History tells us that a lot of Indian exports have been in the commodities space. One of the first names to attempt internationalisation in the brands space include the Air India Maharaja way back in the 1940s or 50s. The local market is so active that Indian brands find it difficult to envision an international presence. It’s not inertia but a preoccupation with the domestic space. The gap is actually a gap in the vision. China has an equally big domestic market, but they have had an eye on the international market fairly early in the day. For most Indian corporates, the domestic market is the primary market. While it is understandable, a little more importance to the international market will help.

India has the capability to deliver. Indian products are present under global brand names, but as contract manufactured products. It shows that we need to transcend and create brands out of products, which are anyway manufactured in India. I cannot see why an Indian brand cannot address the global market.

There needs to be sustainable value. The value to the end customer is really in three layers. The primary thing is the quality of the product. The personality of the product has to be global, and it has to compete with global quality standards. The customer experience is more important than where it is coming from.

Secondly, the emotional side alone can’t be the driver. There has to be cost competitiveness as well.

Thirdly, there is a need to position the offering neutrally as a global brand. Ethnicity is a double-edged sword. The closer it is to the heart of an Indian, the more distant it can be for the international audience. An out and out Chinese ethnic medicine brand may not make sense in India. But there are certain products, which are positioned with a neutral appeal, that have succeeded.

Singapore as a country is a great brand. With the Singapore-India cooperation that is happening, large enterprises can look at a base in Singapore, and create an operating base here to leverage on the Singapore brand value and the networking opportunities it offers, to cater to the global markets. They can perhaps look to create a new brand out of Singapore. It has started happening already. From a branding perspective, there are a lot of advantages.

Singapore also has a very strong infrastructure industry. In the manufacturing sector, too, a lot of Singapore enterprises going into India is a possibility. Trade is likely to be enhanced a lot with the progressive reduction of duties. And the movement of people, professionals, which has already started, will continue.

Funding is a key issue. It has to come from the brand owners. They cannot sit with the belief that the local partners can build the brand. They can add value in terms of being good distribution partners, but the brand owners will have to invest in brand building. There needs to be a consistent theme / play in brand building across the world with some alliterations to suit the local market.

India should ride on the youth bulge it has. Service brands, which require the potential for young people, should ride this. And this can go well beyond the BPO and IT sectors.

All around the world, there is an ‘India fever’. In the last few years, thanks to IT and brands like Infosys and Wipro, this fever has kept rising, and it is now a great time for some of the other sectors to enter the fray.