In a decrepit grocery store in Mahmudabad, a small city in the northIndian state of Uttar Pradesh, one product stands out on its cluttered shelves: cans and cans of Horlicks.
A. Khan, the owner of the roadside shop, says the traditional British drink manufactured locally with malted barley and buffalo milk is a bestseller. “Kids love it and mothers prefer it to more sugary drinks,” he says.
The success in India of Horlicks, which is owned by the UK-based pharmaceutical companyGlaxoSmithKline, is not limited to the small northern city.
Horlicks, first introduced to India by returning Indian soldiers who had fought with the British Army in the first world war, enjoys blockbuster sales across the country, overtaking popular drinks such as cola from Coca-Cola and Pepsi in terms of sales, and is second only to Bisleri, India’s best-selling water brand.
Horlicks’ success played a key role in boosting GSK’s non-pharmaceutical products sales in India by 19 per cent last year, compared to the 1 per cent sales rise in the US and a 1 per cent drop in Europe in the nine months to the end of September 2011.
However, the soothing beverage is just one of many products once manufactured in England, Scotland and Wales that have become de facto Indian consumer goods thanks to their overwhelming success in Asia’s third-largest economy.
Besides GSK’s Horlicks, the shelves of India’s predominantly small, family-owned shops are filled with UK brands.
Cadbury’s chocolate bars, Unilever’s Lifebuoy soap, Reckitt Benckiser’s Dettol disinfectant, ITC’s Gold Flake cigarettes and Woodward’s Gripe Water are ubiquitous.
The success of these brands and the groups that make them – many of which have since listed in India – have spurred newer UK consumer groups to make a push into the fast-growing economy.
United Biscuits, maker of the quintessentially British brand McVitie’s digestive biscuits, set up its first plant in India in 2009. The company is now looking to build a strong distribution network to reap the same results as its more established competitors.
However, Neelesh Hundekari, head of lifestyle practice at consultancy AT Kearney, says that replicating the success of Horlicks and Cadbury, which is now controlled by Kraft of the US, will be a tough task.
“It’s not easy to build a trusted brand in India,” says Mr Hundekari. “You need to understand Indian tastes, as we are a very diverse country. It also takes time to build a distribution network as India’s retail market is fragmented. To succeed in the long term you need to be very patient.”
The UK brands are thriving in India predominantly because they have an established long-term presence in south Asia, with local manufacturing facilities and localisation of their products. For example, Horlicks offers specific flavours, such as cardamom, and additional vitamins for the Indian market.
Unilever attributes the longevity of its Lifebuoy soap, which it says is used in 140m households in India and boasts an 18 per cent market share, to a combination of its social mission, distinctive pink colour and marketing.
The soap was born out of the Public Health Act in late 19th-century Britain. Many of the challenges at that time – booming population, migration from rural to urban areas, swaths of slums with poor sanitation – can be found in today’s India, creating “huge health problems which frankly could be solved by the humble bar of soap”, says Keith Weed, chief marketing and communications officer at Unilever in the UK.
The strength of these older brands has led many Indian consumers to consider them more as Indian rather than “Made in Britain” products.
“Many of these brands have been in India for decades, in some instances even before independence [in 1947],” says Arvind Singhal, chairman of Technopak, an Indian retail consultancy.
“The success of these companies is that they have become Indian to your average consumer here ... and their products are also tailored for a domestic buyer,” he adds.
A bar of Cadbury chocolate or Lifebuoy soap can be found in as many as 50,000 of India’s 600,000-plus villages, inhabited by the majority of the country’s 1.2bn population, as well as Mumbai’s crowded Dharavi slum, one of Asia’s largest.
"All companies have established strong distribution networks and their reach goes way beyond the big or mid-tier cities; they have gone deep into rural areas ... [and have] done things the hard way but it’s rewarded them,” Mr Singhal says.
“To crack the Indian market takes time; if you are in a rush you are bound to fail,” he adds.
