Reverse innovation: FMCG products developed to suit local tastes being marketed successfully across world
What do spicy snacks, nimboo pani, hair oil, fairness creams, water purifiers, masala noodles have in common? Indian consumers of course, you would say. Not exactly.
Products suited for the Indian market are now being marketed abroad as well, and by no other than multinational companies who developed these FMCG goods to suit Indian tastes in the first place.
So if Hindustan Unilever (HUL) is taking its water purifier brand Pureit to new global markets, PepsiCo India, makers of Nimbooz, is introducing its snack brand Kurkure, which was developed for Indian tastes, in key markets across the globe. Likewise, French cosmetics major L’Oreal has taken a slew of its innovations developed in India, such as Garnier Men PowerLight range of skincare products and Garnier Fructis Shampoo (with oil), to global markets.
Termed reverse innovation (products originally conceived for developing economies but now being marketed in other geographies in their original or modified form), the concept is clearly gaining momentum in the Indian FMCG space.
After launching its home grown brand Pureit in Indonesia and Bangladesh in 2010, HUL has recently taken it to key markets in south Asia, Latin America and Africa. “Pureit is currently sold in Sri Lanka, Brazil, Mexico and Nigeria. We are selling Annapurna (salt) in Ghana and Wheel (detergent powder) in Bangladesh as well,” said a spokesperson from HUL.
HUL is currently selling its home-grown brand Fair & Lovely, a skin whitening cream, first launched in 1976 in India, in 30 countries across the globe.
PepsiCo, the second largest food and beverage company in the world, is adapting its Indian innovation Kurkure for western markets. “What works really well for PepsiCo India is to export the ‘indovation’ (Indian innovation) idea to other markets where it can be manufactured locally. Kurkure is currently available across the globe wherever there is a large ethnic Indian population,” a spokesperson from PepsiCo India informed FE.
PepsiCo India’s baked crackers brand Aliva and lemon-flavoured drink Nimbooz are some of the company’s other innovations out of India that have attracted attention globally and are currently being adapted to suit local tastes in overseas markets.
“These are all products invented in the Indian laboratories of multinational companies, originally made for Indian consumers, but today a hit in global markets,” said an industry analyst. Due to high bulk and low shelf life, packaged foods and beverages are not ideal for exporting to global markets. Which is why companies like PepsiCo are exporting the concept of making Kurkure for selling in other markets.
Yet another multinational, Nestle SA, the Swiss food and nutrition giant, has taken its Indian brand, Maggi Masala Noodles, to many markets across the globe. In addition, the company is planning to take its spice brands specifically developed for Indians, such as Maggi Pulao Masala (in sachets) and Maggi Masala Magic, to other markets. The company is also planning to take its Indian brands Maggi Noodle Atta and Maggi pasta soups outside India.
Recognising the growing significance of Indian innovations, multinationals are increasingly leveraging India as an ‘innovation hub’. In November 2012, Nestle opened its first research & development centre in Manesar, close to Nestlé India’s headquarters in Gurgaon.
“Our R&D centre in India will help us gain important insights into local consumers’ eating habits and taste preferences, as well as greater expertise in using and processing local ingredients to develop products for India and beyond,” said Paul Bulcke, Nestlé’s CEO, while inaugurating the centre.
“As with all Nestlé’s R&D centres, it will be part of our worldwide R&D network, enabling us to acquire local knowledge and use it on a global scale,” he added.
Like Nestle, L’Oreal inaugurated its new research & innovation (R&I) centre to study Indian hair and skin specifications and expectations of Indian consumers two weeks back. L’Oréal plans to invest a total of Rs 970 crore in India from 2011 to 2016.
However, not all Indian innovations have been marketed successfully in the global market. For instance, Coca-Cola India found it difficult to introduce its acquired Indian brands Limca, Maaza and Thums-Up in other markets, as consumers found Maaza and the other brands too sweet.