In the last few years a number of local
brands in BRIC countries have not only strengthened their position in
the domestic market but also begun exporting their products and
services across the world. Bharti Airtel started out as an Indian
telecommunications company, but now has operations in 19 countries
across Asia and Africa. In fact, Business Week has ranked it amongst
the top 6 technology companies in the world.
To turn to a starkly different
category, Herborist is a Chinese cosmetics brand which is popular not
only with Chinese women but also French, Dutch and other European
consumers who buy it through the reputable distributor Sephora.
Sportswear is a particularly
fascinating category in this respect, and China has become quite the
battleground for a fierce contest between local brands Li-Ning and
Anta on the one hand, and the international goliaths Nike and Adidas
on the other. Whilst the two global giants had traditionally battled
each other for market leadership, in 2009 Adidas slipped from second
to third place as the local brand Li-Ning took off. In response to
this unwelcome development, Adidas has revealed plans for an
aggressive 2011 strategy in China – including opening of 500 new
stores – in a bid to wrestle back their original second place.
Anta, for their part, has recently signed the basketball star Kevin
Garnett who previously endorsed Adidas. To top it all off, Li-Ning
has quite literally parked its tanks on Nike’s American lawn -
Li-Ning’s US store is just down the road from Nike’s global
headquarters.
These challenger brands have quite a few
advantages over the global Western ones. Firstly, they often have a
far more efficient cost-base structure. Secondly, they’re well
positioned to cater for other emerging economies (think Bharti Airtel
in Africa). Finally, they are less likely to be perceived as
‘arrogant’ the way that some Western multinationals are – just
think how hard HSBC has worked to differentiate itself from the
monolithic, corporate, global Western banks.
Companies from emerging economies are
no longer playing by the rules of the West – increasingly they’re
calling the shots. This does not mean that Western brands are going
to become extinct, but it does mean the end of Western dominance in
the world of communications.
