Sanjaya Baru | Building brands: Tata & Satya top of India’s list

Earlier this year the publication “Brand Directory”, an annual report of the world’s top 500 brands published by Brand Finance, reported only two Indian names at the top of the pile. Tata was the only Indian company to make it to the top 100, placed at 78, while Microsoft’s Satya Nadella made it to the very top of the list of 250 global CEOs for his contribution to “Brand Guardianship”. That’s about it.

Since 2007, Brand Finance has published this global brand directory (brandirectory.com/download-report/brand-finance-global-500-2022-preview.pdf), an annual report of the “world’s most valuable and strongest brands”. In that inaugural year the United States and member countries of the European Union accounted for 82 per cent of the world’s top brands, with Japan, South Korea and Australia making up for most of the remaining 18 per cent.

A decade later, by 2017, several Chinese firms entered the top 100 list, with the Industrial and Commercial Bank of China (ICBC) making it to the top 10, and China Mobile placed at 11th place. Meanwhile, the Tata Group had climbed the 500 ladder, but was placed 103, missing by a whisker a slot in the top 100.

Five years later, in 2022, the United States continues to dominate the global brands list, with Apple at the very top, followed by Amazon and Google, and still accounts for 48 of the top 100 global brands. But, here’s the change. China displaced the European Union as the second ranking geography for top brands, with 23 of its brands among the top 100. The EU, mostly Germany (7 out of 10), accounted for 10 of the top 100. The global country ranking of top 100 brands this year shows the US at the top, followed by China, Germany, Japan and South Korea.

The Tatas entered the top 100 list for the first time in 2020 and in 2022 are placed at 78^th place.

If the dominance of the United States remains an important part of the story, with tech, retail and services contributing to American brand leadership, the headline story is the rise of Chinese brands and the decline of European ones. TikTok, for example, was named the world’s fastest rising brand in 2021. Names like Huawei and Alibaba have become household names around the world. The 2022 report states that: “Over two-thirds of the total brand value in the ranking is attributable to the two countries, with the US accounting for 49 per cent ($3.9 trillion) and China for 19 per cent ($1.6 trillion).”

Recognising the importance of developing national brands and promoting their global presence, the government of Prime Minister P.V. Narasimha Rao set up the India Brand Equity Foundation (IBEF) towards the end of its tenure in 1996. While it was located in the Union ministry of commerce and industry, it hired a private sector CEO. The IBEF claims that its “primary objective is to promote and create international awareness of the Made in India label in markets overseas and to facilitate the dissemination of knowledge about Indian products and services. Towards this objective, the IBEF works closely with stakeholders across government and industry”. A quarter century later, IBEF has little to show in terms of promoting Indian brands overseas.

While Tata is the only Indian brand in the top 100, other Indian brands listed among the top 500 include telecom firms Airtel and Jio; IT firms Infosys, Wipro and HCL; financial sector firms SBI, HDFC and LIC; and, oil major Indian Oil and infrastructure firm L&T. An major reason why the Narasimha Rao government created the IBEF was the recognition at the time that a country’s global image is enhanced by the power of its brands. A small island like Cuba is known for many things but is valued for its Cohiba cigars!

At the global level, tech firms dominate global brands with a cumulative brand value of $1.3 trillion. While 50 technology and tech firms are listed in the top 500, three have an overwhelming global presence -- Apple, Microsoft and Samsung. A close fourth is Huawei. The report adds: “Huawei’s smartphone business was hit hard by US sanctions, but it reacted positively by heavily stepping up investment in both domestic technology companies and R&D, as well as turning its focus to cloud services.”

An interesting story that I first reported as a journalist about the national value of a brand goes all the way back to the early 1990s. On a visit to South Korea in 1993, on the eve of the historic first-ever visit of an Indian Prime Minister to that country, I was told a delightful tale of Korean branding at the Hyundai headquarters.

When Iraq’s dictator Saddam Hussein invaded Kuwait in 1990, over a hundred South Korean nationals were stuck in Kuwait and eventually holed up at the country’s embassy. A South Korean aircraft had landed there with the intention of flying all its nationals out and home to safety.

By the time the flight had landed in Kuwait, the city had been overrun by Saddam’s troops. The diplomats at the South Korean embassy did not know what to do. A Hyundai executive came up with an idea. The Hyundai brand, he told his country’s diplomats, was very popular in Iraq. All hundred of us can get into a couple of buses flying the Hyundai company flag and drive from the embassy to the airport. No Iraqi soldier would stop the vehicle, he assured. That is precisely what the embassy officials did. Iraqi troops smiled at the Koreans and let them pass, saying “Hyundai, Hyundai”! All South Korean nationals flew back home to safety.

TikTok has done for China what Hyundai did for South Korea, Honda does for Japan or Apple does for America and Mercedes-Benz does for Germany. Popular brands create favourable impression about the country they belong to. India too needs its brands of global quality and global appeal. It is not a coincidence that in the Western media Britain’s new Prime Minister Rishi Sunak is often referred to as the son-in-law of the man who created Infosys. Rather than Mr Sunak brand Infosys, Infosys brands Mr Sunak. Clearly, till last week, more people around the world had heard of Infosys than Rishi Sunak.