The Indian Economy Blog

July 29, 2007

Local vs Foreign

Filed under: Business — Arjun Swarup @ 9:57 pm

This is something about which I have been wanting to blog for a while, and would love to know what IEB readers think.

Check out this article, written around March 2006, by Amelia Gentleman, the IHT correspondent in New Delhi.

Its a well written article, and makes some good points, but what I found intriguing was this bit, right at the beginning:

It takes a while to identify anything Indian inside the Metropolitan Mall in the rich Delhi suburb of Gurgaon. Harrison Ford peers from the cinema posters; Tommy Hilfiger lines up alongside Reebok and Benetton on the shop floor. Only how a cleaner balances flattened cardboard boxes on his head, and the prominent sign at the escalator (‘Be careful of your sari while riding the stairs’) hint this is not a shopping centre in Alabama.

American tastes colonise the food hall. Tex Mex jostles with hot dog stalls and ice cream parlours selling Smoothies. At Pizza Hut, teenagers buy Indianised versions of the global brand – Spicy Korma and Tikka Chicken pizzas, sprinkled heavily with green chillies

I found this very surprising, to say the least. I was in Delhi for six months last year, and having been in Gurgaon, spent a fair amount in the very mall mentioned in the article. I was struck by the proliferation of local brands and the high level of localization. It is certainly much higher than most other emerging markets (and even developed markets in Europe, where American cultural influence is very strong, and quite resented at times).

In India, across a lot of spheres, the ‘soft power’ of Indian culture seems to be quite evident. Films are probably the most obvious example – but even in other areas, such as clothing, food, the growth and sustenance of local brands and the preference for them is very noticeable (‘soft power‘, as some call it).

To give a rather cliched example, the lines for the latest bollywood flick, in the very mall mentioned, would always be longer than the latest Hollywood flick. Even on television, the massive popularity of Ekta Kapoor’s drama factory soaps far outstrips all of the American offerings. Even major American consumer brands, such as Pepsi, have used Indian role models, localizing far more extensively than in other markets. There is definitely a lot of fondness for international, mostly American, products, but it certainly doesnt swamp all else.

My impression has been that if there is one country where malls and consumption has a very strong local flavour, it is India. I certainly dont find the Metropolitan mall easily inter changeable with a mall in Alabama (whereas most other malls would)

I would love to know what others think about this.

Cross posted on Smoke Signals.

9 Comments »

  1. I suppose that when you say “local consumption” you are not referring to Indian Economy; you are referring to consumption of US brands (and products) in India. Perhaps the post should have been titled “The power of localized consumption”.

    Comment by Randhir — July 30, 2007 @ 1:26 pm

  2. Ya, you are so right. Alongside the pot pourri of international cuisines,the food courtsin most indian malls invariably have chaat, mughlai and other indian fare. The fact that even pizza hut and other american brands like mcdonalds have had to defer to the indian palate and offer ‘tandoorified’ and veggie versions shows how staunchly mainstream indian taste (be it in food, popular entertainment, clothes ) remains localised.

    Comment by dipti — July 30, 2007 @ 3:36 pm

  3. I beleive this adaptation is the beauty of Indian culture.. Indians have always adapted from the West (from the British then and now from the US) but deep down hold on to their root values..

    Comment by Archana Kumar — July 30, 2007 @ 5:23 pm

  4. Perhaps another question – what is American? From my experience, America is very good at taking in from all the diverse cultures that have been there. Chicago – Polish and Irish. New York – Italian, Irish, Hispanic. Boston – English. Michigan – Swedish, Icelandic. Florida – Hispanic (Cuban, Colombian etc). California – Mexican, Asian (Japanese, Korean, Vietnamese). Louisianna – French. These are just off the top of my head but you have to add the African, Carribean mix in there all over.

    Indian culture is a very new in the USA. Bollywood is a strong brand and our food is an equally strong cuisine. But European cultures have long permeated the USA – think German, British, Polish and Italian. Indians in the USA are more interested in blending in than stamping their mark. With recent strides I hope Indian culture is noticed more and maybe a mall in Alabama will have a Bollywood movie in the multiplex.

    Comment by Nikhil — July 30, 2007 @ 7:40 pm

  5. Interesting reference to “Alabama” instead of say a mall in an east or west US coasts.

    Beyound what’s foreign and local – it’s normal for people to notice what they’re already know. This IHT correspondent seems to be an American – so it’s natural for her to notice what she’s familiar with. She doesn’t argue that culture is not localized, but it’s a fact that the food stall were tex-mex or pizza (while both not invented in US, are distinctly American the way they are served) not a dosa or a bhel-puri stand.

    The fact is we give a premium to all things foreign, usually American – especially food (including hot dogs made from garbage meat) and other cultural products – and not interested in paying a premium for similar Indian products. Whatever the reason (I think it’s, largely, inferiority complex), foreign products wins – even if we add tikka masala on that pizza.

    Comment by Chandra — July 30, 2007 @ 11:39 pm

  6. Writer Amelia with IHT is right – This is not Alabama. She did not compare it with Los Angeles, Chicago, NYC etc because you will not find only American brands per se in these places, especially in food. You will have Asian (Chinese, Japanese), Italian, also Indian in a lot of malls besides so many others…

    She is talking about the power of branding than the local vs foreign concept here. Pizza Hut, Reebok etc are all powerful and established brands. They have the power to pull people, have the money to invest in the right places and buy/train the right executives…Yet, they are all customizing their product line as per the needs of Indian consumer. But there brands are facing much higher competition than before now – Haldiram’s has emerged as a powerful brand, even Ramdev Yoga is a psuedo-brand, where people are cutting on sodas after listening to him.
    But Indian consumer looks at the origin of the brand too, which is because of the perception of the west’s superiority. If you go to the same Gurgaon mall and start looking at consumers – they are dressed in international brands and imitating the american accent with a lot of hand gestures. One of the main reasons can be because of the huge R&D investment US has made, everything cool and hip is from US.. An Ipod, HP, Dell, Motorola, Nike, Reebok, Levi’s…Even Pizza Hut…Pizza is from Italy, Pizza Hut from US….

    Comment by Aseem Juneja — July 31, 2007 @ 12:21 am

  7. 0. Yes. Indian industries and brands haven’t exactly died out en masse since 1992.

    1. I think the writer overstates it when he suggests that this local brand thing is uniquely Indian. I remember getting the same local brand vibe in Muscat, for example. Once one moves to the developed world, it is even starker: most luxury brands (cosmetics, clothing, perfumes, watches, jewels etc) are European, not American. Consumer electronics are predominantly Japanese anyway.

    2. Consumption of foreign goods is a generic high status good *everywhere*. Sashimi is fancier than hamburger everywhere in America, and in most places outside. If anything this trend will intensify in India with time. Now we just watch Jerry Bruckheimer films. Surely as we get more upmarket we’ll discover the snob value of Bergman and Mizoguchi and Godard.

    Comment by D — July 31, 2007 @ 12:47 pm

  8. There were two of us – a friend, who subsequently served as a marketing whiz in P&G and Coke for nearly 12 years, and I, who never took a straight job in brand marketing!

    When we wrote an Independent Project (a thesis in lieu of coursework credits) on globalisation, internationalisation and localisation in marketing during our second year at IIM-Ahmedabad in 1993-94, we were probably way ahead of our time. Professor AK Jain, not known for doling out straight A grades, gave us an A, and then used the IP as the basis of a new course in international marketing.

    Perhaps it is time to take the thesis out, dust it and urge you all to read it! :-) The discussion here mixes nuances of perceived nationalities of brands, with localisation strategies. As a result all we have is disagreements and no coherent, cogent argument.

    That said the concept of an out-of-town mall, where families drive and spend a day-out (!!), is itself very American in its origin. In the UK, where we have (sadly) imported the concept lock, stock and barrel, the junk food brands are dominantly American chains – McD, Quiznos, Subway. The coffee chains are mainly home grown such as Caffe Nero. The more upmarket food is also from UK chains such as Yo Sushi! while some typical niche British brands are also making their way in the melee such as Spud U Like.

    I am still not sure what this post was about…

    Comment by Shefaly — July 31, 2007 @ 1:36 pm

  9. [...] Arjun Swarup has discussed this briefly in his post on the Indian Economy blog where he talks about the power of local consumption. He mentions that while we may import western concepts (talking in relation to brands and the mall [...]

    Pingback by Does Dining and Music mix? « A wide angle view of India — December 19, 2007 @ 7:39 am

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