Local brands are all the rage now

Priyanka Pani Mumbai | Updated on March 13, 2018 Published on January 28, 2014

Well-entrenched Local brands have a strong distribution network in interior India

Give bigger rivals a run for their money on everything from chips to detergents

Pooja Sharma, a 35-year-old housewife in Mumbai’s Andheri suburb, buys a lot of locally manufactured consumer products, particularly food items.

Not that she has anything against national and multinational companies. It’s just that the pricing, packaging and quality of local products have prompted Sharma and many others to shift their loyalties to brands such as Mala’s (squash), Mapro (jams and squashes), Bedekar (pickles), Makarand (honey) and Ching’s (noodles and sauces).

Retailers agree that such a shift is happening. Manubhai Patel, a kirana shop-owner in the same locality, said: “Of late, consumers are asking for more of these local brands.

They are not only cheaper than brands owned by Hindustan Unilever, Marico, Nestle and others, but are also good in quality. Once they use these products they come back asking for more.” Experts say regional brands no longer cater just to a particular region, city or State but also compete with big players nationally. They are investing heavily on advertisements, innovation, packaging, and creating more product variants.

Going national

Pune-based Parag Milk Foods, which owns brands such as Go and Gowardhan, has grown from a small milk supplier to a national dairy player. Similarly, UP-based Ghari detergent has already overtaken HUL’s Wheel in the North and is now planning to enter other regions.

Mumbai-based chips and savouries brand Garden, which was bought by Chennai’s once-regional and now national brand CavinKare, is giving Pepsi’s Lay’s a tough fight.

Chamak detergent in Rajasthan has become a household name in just a few years. Similarly, Gujarat’s Wagh Bakri tea is going national. Himganga hair oil, which competes with Marico’s Parachute and Emami’s Navratna, has already garnered 27 per cent market share, according to Euromonitor data.

No middle-men

Vivek Veda, senior analyst at investment bank and brokerage firm Espirito Santo, says regional brands do not have to deal with layers of middlemen, thus making them 20-25 per cent cheaper than the national brands. .

With big brands hinting at cuts in ad spends, regional brands are likely to have more visibility. According to a report by Religare, the economic slowdown will lead to the dominance of regional players in the fast-moving consumer goods segment.

Brand consultant Alpana Parida of DY Works says regional brands have always had a strong presence, which has made them a target for acquisitions. Of late, these players have also received a lot of attention from private equity firms, she added.

“These brands have strong distribution in interior India, where global players have not been able to make inroads,” she added.

Published on January 28, 2014
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