Will nationalist sentiment increase demand for local brands?

PM Narendra Modi's speech earlier this week gave the 'Swadeshi' sentiment a boost. Will this impact brand choice?

Most children who go to school wear Bata shoes. Generation after generation in India has worn Bata shoes to school. The brand is so popular that more people, especially school children, seem to relate to it, than the iconic 'School Chale Hum' campaign. Now, is Bata 'Swadeshi' or 'Videshi'?Prime Minister Narendra Modi recently urged Indians to ‘be vocal about local’ in a speech. He talked about domestic production and urged Indians to consume more locally produced items. Although he didn’t mention any company, many local brands across categories started rolling out creative communication in response to the speech.

But, what is a local brand? Using Bata as an example again, the brand originally hails from the Czech Republic and entered India in 1931. Last fiscal (FY19), Bata, which has a 21.48 per cent market share in India, sold around 47.25 million pairs of shoes in the country. It has production units across the country and, in fact, there is a colony in West Bengal named after the brand - 'Batanagar'. Then there is Hindustan Unilever (HUL), which markets products like Lifebuoy, Lux, Surf Excel that have, over the years, become an integral part of Indian households. Today, these products are a part of the very fabric of Indian culture. When PepsiCo says 'Youngistaan Meri Jaan', it connects with the pulse of young Hindustan. So, will this connect get disrupted as the country delves into the ‘Swadeshi-Videshi’ debate?

In India, global giants and local enterprises compete with each other across categories. Will the PM's speech and the following reaction help local marketers? Should global organisations worry about the rise in nationalist sentiment? Is purchase driven by emotions in India, or is it a rational decision based on value proposition? At a time when hygiene and sanitation are the difference between life and death, will Indians replace their trustworthy personal care product with another one just because it is owned and produced by a local or 'Swadeshi' brand? Does nationalist sentiment sway brand choice? We reached out to a set of experts to find the answers to these questions, and here is what they had to say:

Edited Excerpts:

Jitender Dabas, COO, McCann Worldgroup India

A lot of manufacturers in not just big but even in small and medium industries are importing a lot of finished goods as well as components produced in other countries. Whatever the Prime Minister said in his speech didn’t really focus on B2C behaviour. The crux of his speech was if everything that is consumed in India is produced within the country, then the industries will survive and we will tide over the economic crisis.

The argument actually moves away from the brands . It is not about the label on the product, but where it is manufactured, where it created jobs, where it created economic value.

I don't see suddenly the behaviour changing much. Though there could be a spurt in such messaging but I don't see Indians all of a sudden saying that we will only own a 'Swadeshi' labelled brand.

As per McCann’s ‘Truth about Global Brands’ across markets consumer’s propensity to buy a local brands varies as per different categories and say is highest when it comes to the food category but when it comes to technology and auto, global brands are preferred in most countries.

In fact as we enter a period of uncertainty and high concern for safety and health, people won’t buy sub-optimal products/less trusted brands. You will simply buy the best product available at that particular price point. In fact, going forward, consumers are going to be even more value-conscious and, therefore, will become less emotional and more rational while making purchase decisions.

Lloyd Mathias, angel investor and business strategist, former APAC marketing head of HP

When the Prime Minister made the point, 'be vocal about local', his real concern was about India's low share of manufacturing versus China, and the fact that many global supply chains completely bypass India. Already, there is a belief across the world against the concentration of the value chain in China. I think that was really a call for these supply chains to examine India as a manufacturing base in light of the disruptions due to COVID-19.

The PM's call for 'atma-nirbharta' should make global giants rethink their supply chain and procurement strategies, and also recognise that diversifying ones manufacturing can provide a good hedge, in moments of uncertainty. The PM made it clear, in his address, that India is committed to removing hurdles and attracting a share of the global value chain. As it stands, many global organisations are already looking at dispersing manufacturing and 'near sourcing' options to obviate on similar disruptions in the future.

Categories that are heavily dependent on imports, as opposed to local manufacturing, will feel the pressure. In no way do I see the PM’s speech making a demand to boycott global brands, though over-zealous supporters may try to make that interpretation.

Sanjay Tripathy, founder, co-founder and CEO Agilio Labs, and former CMO, HDFC

The Prime Minister has made an emotional appeal to drive consumer demand for India-made products. Eventually, as consumers, we will all choose the goods that offer us a good value at the same price point. So, I don't see global giants getting impacted due to PM's speech. Unless there are players creating local campaigns urging people to boycott product offerings of global players. We saw brands doing that at scale a few years back, but it has stopped now because at the end of the day, India is an open market and people will buy what suits them the best.

See, purchase decisions are always rational and when it comes to emotions, global brands have spent a lot of money over a long period of time to build the emotional connect. Say, for example, someone likes Nescafe coffee, will that person immediately switch to a different brand because someone asked him to boycott global brands? What are the Indian alternative of Nescafe available in the market? Most categories won't be impacted. Some categories, like dairy products, honey, and apparel to some extent, may see some impact temporarily.

The campaigns will look more Indian, but a brand like Cadbury has done this for a long period of time, and so have others. At the end of the day, consumers see two things, one is the product and the other is the communication. So, brand marketing will look more Indian, going forward.

Patanjali spokesperson

The Prime Minister, through his speech, has rejuvenated the ‘Swadeshi’ movement in this country. He said ‘be vocal about local’ to help local enterprises reach global heights. Starting from East India Company to Unilever, Nestle, Coca-Cola, Pepsi, Colgate and many other foreign companies are enjoying leadership across sectors. The time has come for Indians to dethrone these foreign giants and replace them with ‘Swadeshi’ brands.

We urge the government to ask all its offices to purchase products made only by ‘Swadeshi’ manufacturers, and not these foreign companies. Patanjali is committed to making India self-dependent by establishing itself as a prominent player in food products, FMCG and other sectors. Patanjali aspires to become a Rs 1 lakh crore company, which will provide livilihood to 10-20 crore Indians. All the profits made by the organisation will be invested in the country’s development.