'Local for vocal' doing good but consumer would still prefer value, says Preeti Reddy of Kantar

Brands that have invested in brand-building and helped consumers navigate the current situation have grown, says Preeti Reddy, CEO, South Asia, Insights Division, Kantar.

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In an interaction with BestMediaInfo.com at the launch of the BrandZ Top75 most valuable Indian brands for 2020 report, recently released by WPP and Kantar, she said as urban areas have felt the effects of the lockdown more than rural, it is important for brands to incorporate rural markets in the growth strategies.

“In the past, rural has been an important driver for growth and even more so now, when growth has slowed down and rural is seeing a relatively better year because of the monsoon and more money in their hands. Migrant workers have gone back and so consumption in a sense has shifted. So, for marketers, it means not so much communication but for the entire market to target rural,” she said.

According to her, the retail sector stayed relevant in the lockdown as they adapted to digital to reach consumers. “Kirana stores and the large brick and mortar stores have found ways of getting to the consumer, either through digitisation or through aggregators and they've been there for the consumer so they have not lost and are relevant,” she said.

David Roth

David Roth, CEO of The Store WPP, EMEA, and Asia and Chairman of BrandZ, said across the world, there is a growth in love and respect for retailers. There is a realisation of the vital role they play in keeping us fed, he said.

Reddy said the pandemic highlighted the importance of retail and telecom sectors among consumers in urban and rural. Speaking about BSNL, a new entrant in the top brand’s list she said, “Jio and Airtel are at much higher ranking, Airtel is number four and Jio is number seven in our ranking and I think more importantly they have consistently invested in the brand building over the years. Airtel for a longer time and Jio more recently. BSNL hasn't done that but maybe this is their chance.”

Speaking about how consumer trends have changed, Reddy said people’s confidence in the future is low and they are wary of spending. “They are not spending money on large indulgences, or big-ticket items, etc; they're also looking at the value that a brand is giving at the price. We used to have a trend of premiumisation. That has stopped, not that they're buying cheap, but they are also looking at value. The other thing is that they have digitised very aggressively in terms of how they shop, how they buy, how they live, and how they consume. In India, it is essentially on the mobile phone. So their mobile phone is like their lifeline and they're doing everything online, primarily from the phone.  They have discovered the benefits of shopping online and they are doing that for you know, for high-frequency low-value purchases,” she said.

Reddy said the call for using local brands has seen traction from consumers. However, they would still prefer value. “People would like to buy local, but they don't know what local is. They don't know which brands are local and which are global. I think that is confusing them. For example, Bata is a global brand but they think it is Indian. The other thing is that whatever it is, the brand still has to deliver value. They will not buy a brand just because it's Indian. If it doesn't give, it doesn't have value and they certainly will not pay a premium for an Indian brand unless there is value to them. They're quite clear in their minds about what the choices are.”

Roth said it has become important for brands across the globe to communicate the value proposition and differentiator. “I think it's not possible for governments right across the world to instruct consumers to purchase one thing versus another one, which will drive the consumers and brands to really reflect the value propositions. That's what brands must focus on,'' he added.

Speaking about how brands have innovated during the period, Roth said the way in which companies have managed to reach out to the consumers has been impressive. “There’s innovation in the way in which things get delivered to people, the way in which different types of companies have come together to partner with other companies. I think the communication industry is full of highly creative people, the ways in that it manages to pull things together and to do that in a safe way, and still have good creative ideas that make people smile and that makes people think that brands are a part of the helping them to navigate.” 

Asked how India reflects on the global outlook, Roth said the top 10 brands in the world are made up of very strong digital commerce and technology brands. He said Amazon has grown significantly, increasing the value by 32% to $415 billion.

“The best way of looking at those narratives is the share price performance of investments on a bundle of most valuable brands. Global brands and the top 25 Indian ones versus their respective stock market performance. Here we see the same story, which is that the topmost valuable brands significantly outperformed the market indices of the stock and up to today. That proves a very important point, which is investing in brands, and I use the word investing very carefully. It is an investment as a cost to the business to deliver superior to shareholders. In times of stress like these, you appreciate the investments that have been made over the years in developing strong brands, because it ensures that you outperform as everybody else drops. And you will recover at a much faster pace,” he said.

Roth said as scarcity of time has increased in people’s lives, brands that help consumers perform things in a quick, efficient, fast, innovative, and fun way will benefit.

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