How Emerging Market Brands Will Go Global

Last week, Columbia published an article by Sharon Kahn on its business school’s blog, which discussed strategies that emerging markets would do well to consider when raising global awareness of homegrown mass consumer brands.

According to a survey conducted by Interbrand, neither of the planet’s most densely populated countries—India and China—had a single recognizable global brand among last year’s collection of 100 Best Global Brands. Nurmalya Kumar, an executive council member of the Tata Sons conglomerate, London Business School lecturer, and co-author of Brand Breakout: How Emerging-Market Brands Will Go Global predicts that in the next 10 years, China will launch a recognizable worldwide brand, followed shortly by India.

Kumar uses South Korea and Japan as examples of former emerging markets that managed to snag global footholds for their respective brands—Samsung and Toyota. “The halo of the brand eventually extended to the image of the country,” explains Kumar. Those companies enticed Western wallets by introducing bargain products at equivalent prices. They gradually improved quality until their competitors began to feel the pressure.

Kumar explains that China is in a unique position to make this transition sooner than later based on its role as a manufacturer of high-end, globally recognizable Western products. “If 100 go the private label route then start to market on their own, 10 may eventually become global brands.” India’s strong suit lies in its ability to market products—“a prerequisite to selling across borders.”

Kahn explores 3 of the 8 strategies that Kumar outlines in his book for companies in emerging markets to garner global awareness for their brands.

1. The Diaspora Route, in which companies parlay a brand’s inherent nostalgia within immigrant communities who have disposable income to lay the groundwork for international expansion. HSBC, which began as a Chinese bank, is an excellent example of this phenomenon.
2. The Cultural Resources Route, in which companies deliberately connect products to “positive cultural perceptions” of their respective countries, such as Indian yoga or Chinese silk. One company, Herborist, used Western technology as the conduit for a line of cosmetics rooted in traditional Chinese medicinal practices. The Haier Group, a Chinese, purchased General Electric’s division of appliances, which gave the company instantaneous “consumer credibility and distributor clout.”

3. The Natural Resources Route, in which the following four factors must be secured: 1) the emerging market’s “mythos” plays a role in its marketing; 2) the originality of the product, as well as corresponding high price; 3) “an authentication process” conducted by an independent governing body; and 4) “international branding” of brand in relation to its point of origin. Kumar explains that South African De Beers diamonds, Russian caviar, and Colombian coffee are notable exceptions.Kumar explains that emerging markets should pursue the risk, even if the track record for global brand awareness leaves much to be desired, because “a global presence improves management capabilities and opens new, usually more affluent, consumer markets.”

With regard to the potential for brands from emerging markets to compete or even dominate the landscape, Kumar cautions Western brands to consider the emergence of their Japanese and South Korean competitors on the scene 60 and 30 years ago, respectively. “Do they want to be blindsided by China and India?”

regions: New York City

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