Why India does not have global brands?

Finland has a population of around 5.2 million, which is less than even one-third of New Delhi. If we think of global brands from Finland then there are quite a few. Nokia, Kone, UPM, Fiskars are world famous in their segments. How many global brand India has? Apparently none. Isn’t it strange? Why India failed to produce brands which are known in world?

Let’s go couple of years back. Around 2001 when internet started to become popular, lot of cyber cafes came up. In those places you could pay and surf internet. Most people didn’t have computer or internet at home. The charges at these cafes were around 60Rs (Indian Currency) for one hour. These cyber cafés started to become popular and were doing brisk business. Few of the cyber cafés started stocking soft drinks and other beverages, which the customers could buy and consume while surfing. I remember the price of a 250ml bottle of Coke in any such café would be 15 Rs while at any beverage store or kiosk it would be 10 Rs. Similarly for other beverages, the café owners were charging premium. Was there any logic for over charging? If someone else is selling coke for 10rs and making profit then it should be profitable for café owners as well. More for them, as their infrastructure being primarily used for internet surfing was already factored in the surfing charge. Rather than charging premium they could have sold them at lesser price and yet made similar/more profits. But they didn’t do it?

This example is symptomatic of Indian business mindset. They never held a collaborative approach for customer but wanted to exploit them. This gave them a higher return in short term but failed to establish a relationship. In the café example, if the experience would have been of customer delight then even today, when people have internet at home, one would have gone there to surf internet over a cup of cappuccino. Until and unless it became absolutely necessary, Indian businesses never passed on the values achieved due to efficient supply chain or economies of scale. Customer was never a partner of the supply chain. It takes a time and effort to create a band and does not give return in one or two quarters but in a long term. All the efforts during the initial period goes in creating the brand equity.

This was also evident in the retail industry till few years ago. Big retail chains never passed on the benefit of volume margin or economy of scale rather charged premium for items. When this trend was changed by one or two retail chains the competitive pressure forced others to change it as well. Now they don’t want global retail chains to be allowed in India. They want some legislation to cover their abject mentality of exploiting customers.

Clearly India has still a long way to go for creating global brands.