Happy Deepavali!

This blog is going to be down for the next few days, while I enjoy my Deepavali (or Diwali) with family….So I thought I’d pop in here in advance to wish everyone a very Happy Deepavali, a lot of fun and much light in your lives.

Big Companies, Slow Moves

A couple of days ago, I came across some promotion for this new product from the Unilever stable, the Taj Mahal dessert teas. Since I was already walking out of the supermarket, I couldn’t go back in to check it out, but it set me thinking on why do big companies often enter new markets late?

Premium teas and flavored teas, have in the last couple of years, really picked up in the Indian market. I don’t really have any data to back this up, but the sheer variety that is available and the shelf space that is being dedicated to such teas, surely is some evidence. And this is happening not just at premium outlets or really large stores, but even at neighbourhood family run supermarkets. So there has to be a reasonable level of demand happening.

But Hindustan Lever (or Hindustan Unilever, as they are called now), one of the largest brand-owners in the Indian tea market, has really not set foot in this market, or not to a great extent. I recall seeing some cardamom and such flavours from them, but the exciting new flavours are all really being brought out by other brands. Earl Grey, Chamomile, Orange Blossom, Vanilla, Mint, English Breakfast – you name the flavour, and its available on Indian shelves now. The brands are usually Tetley, or Sri Lankan teas like Dilmah. The strange thing is none of these brands really had any significant presence in India until five years ago, and now they are the face of premium tea, while HLL which owned the tea category, keeps touting the same old Taj Mahal as its premium brand.

Which brings me back to my question – why do big companies often enter new markets late?

I think their very size handicaps them when they look at new markets. For a Rs. 1000 million sized brand, an opportunity that is Rs. 10 million worth, seems very small. The brand waits, and waits, until the opportunity becomes worthwhile. In the meanwhile, smaller brands with smaller ambitions start developing the market. Conventional marketing wisdom infact accepts this as a viable strategy where a big brand enters a market once it has grown to a certain size, and then proceeds to chew it up on account of sheer size and financial and distribution muscle. It could work; On the other hand, smaller brands do sometimes acquire a certain image especially in premium categories, and a late entrant could end up with some lost opportunities.

Any thoughts on this?

How does your company Interview – Part II

A long time ago, I did this post on how some companies interview people and the various biases they bring with them. Now Bombay Dosti has this interesting rejoinder from the other side of the table, and why some of those very practices may be valid in the Indian context. I don’t agree with all that she says, but she does make a mean argument, so go read!