How local brands replaced foreign ones in 50 years

In pre-independence Bangladesh, business and Bengalis seemed to be synonymous with small retailers and some agricultural commodity traders.

Creating a local brand was a distant dream then, but things have taken a different turn now with the rise of big businessmen in independent Bangladesh who gradually gave rise to a thriving private sector to dominate the economy.

And they played a role in positioning hundreds of local brands in the minds of consumers, with many rising to the top of the charts.

Half of the top 50 local brands

Kantar Worldpanel, a leading global market insight firm, found in 2018 that half of the top 50 brands in Bangladesh were local, reflecting the strong rise of local soft assets in the economy.

In modern Bangladesh, consumers take pride in dozens of local brands that outperformed foreign competitors or gave them a run for the money.

Local players also dominate the market for pharmaceuticals, food, salt, cement and steel.

Bridging the gaps over time, Bangladeshi brands complement Bangladesh’s economic growth story with the fastest growing GDP along with its enviable progress in social indicators, and are known internationally as a role model of development. said the research director of the Policy Research Institute, Dr. Mohammad Abdur Razzaque. , also president of the think-tank Research and Policy Integration for Development (Rapid).

He thinks that Bangladesh’s rapid economic transformation has been greatly facilitated by the emergence of a vibrant private sector.

“A relatively well-developed private sector made Bangladesh quite distinct from other LDCs and from many low- and lower-middle-income countries,” he noted.

Bangladesh’s sizable manufacturing-to-GDP ratio (around 20%), which is twice the average for the LDC group and even higher than that of India, Pakistan and Sri Lanka, allowed brands to flourish here, he said.

Independence: Creation of the base

In the Pakistan era, few Bangali-owned private industries such as Mala Saree of Anwar Group of Dhaka set the example that Bangalis could also thrive in big business.

After independence, Bangladesh focused solely on meeting basic needs, mainly food, while the state took over all the industries left behind by the West Pakistanis.

The handful of local entrepreneurs, with prior business experience, pressed ahead with their commercial endeavors, while full-scale privatization was yet to come.

Bangladeshi entrepreneurs started by nurturing existing brands like Nabisco biscuits and Tibet ball soap.

The big change they brought was by creating their own brands.

Over time, they broke the monopoly of foreign brands and Bangladeshi brands now dominate the market in a lot of fields, while in some sectors, foreign players found it profitable to get out of the competitive market.

Contend, then advance

With ample human resources, Bangladesh focused more on exports to global brands, mainly in garments, leather products and some other categories.

The focus gradually shifted to the local market to capitalize on the rapidly growing consumer class and its growing purchasing power.

The legendary rise of the local pharmaceutical industry began under the banner of import substitution in the 1980s, when Square, then a small drugmaker based in Pabna, set up a factory near Dhaka.

Beximco, belonging to the first batch of entrepreneurs in the independent Bangladesh, entered his pharmaceutical company and won everything through dedication and excellence.

The American pharmaceutical giant Pfizer left the market selling its business to the locals before the new millennium and became the Renata of today. Vaccine king GlaxoSmithKline closed its pharmaceutical plant in Chattogram in 2018 amid the emergence of profitable, world-class local competitors such as Incepta in vaccines and dozens of other drugs.

Now, from over-the-counter drugs to cancer drugs, Bangladeshi generic brands are everywhere.

The multinational Bata was synonymous with footwear for Bangladeshi consumers for decades and had no competing brand to compete with here.

Local company Apex Footwear, which began as a contract manufacturer of Japanese and Italian brands in 1990, continued to thrive on exports and, in the early 2010s, took a serious look at the local market.

It took less than a decade for Apex to overtake the century-old global brand Bata in the Bangladeshi market.

Another century-old foreign brand, Singer, has lost its refrigerator and TV empire to local brand Walton over the past decade.

According to a 2021 research report from UCB Asset Management, Walton now owns 72% of the refrigerator market, while Singer supplies only 12% of the market, while Jamuna, Minister and many other local brands have also eaten up the market by Singer.

Singer was also one of the major players in the TV market, and Walton is now far ahead of everyone with a 27% market share, while Singer is in the number two position with an 11% market share. .

Local brands have yet to overtake foreign brands in air conditioners, washing machines, and diversified kitchen appliance categories, but with their growing market shares, it may not take many years for them to replicate the success of refrigerators and TVs like local actors. Walton is now investing heavily in research and development and marketing with an eye toward a global market.

Bangladeshi kitchen appliance brand Miyako, with a 21% market share, is only behind Samsung.

Walton began as a low-cost market competitor in the late 2000s. Its head of business operations, Sohel Rana, believes that in addition to supportive government policies, manufacturing and marketing products in line with need and the power of local consumers helped the company grow and it is now pursuing its global dreams.

Indian Hero and Chinese Phoenix were the bikes that Bangladeshis had been using for decades, but now world-class Bangladeshi exporters like Meghna and RFL’s Duranta are grabbing a big chunk of the local bike market and keen to outbid the brands. foreigners.

Olympic started out as a local confectionery brand in the 1990s, while the market was pretty much split between a bunch of imported foreign and local brands.

It has now become the market leader by a wide margin.

CP, the Bangkok-based frozen ready-meals giant, entered Bangladesh in the late 1990s and expanded its retail outlets across the market in the 2010s. But strong local competitor Kazi Farms Kitchen has apparently surpassed its market in recent years.

In their busy lives, Bangladeshi consumers chose Radhuni and Pran as their top brand choices for ready-made spice mixes.

Local brands ACI Salt and ACI Aerosol are by far the market leaders here.

In tea, the local brand Ispahani is the best brand, leaving foreign ones, such as Lipton and Tetley, behind in the competition.

Where foreign brands still dominate

According to a BBC report citing Kantar Worldpanel market intelligence in 2018, the top nine brands in the Bangladeshi market were multinationals, Tibet ball soap ranked 10th and led all Bangladeshi brands in terms of strength and brand value.

Understandably, Unilever’s Sunsilk shampoo, Lux soaps, and Rin detergent are the three strongest brands.

Local “halal soap” Aromatic suddenly sparks and disappears, local mass commercial soaps Meril and Keya or premium soap Sandalina are not ignored at all by a large group of Bangladeshi consumers.

In the tobacco, paint and hair care markets, foreign players including British American Tobacco, Berger and Marico continue to lead the pack, but local challengers have not left them unanswered.

Foreign hygiene brands Dettol and Savlon have long dominated the market, but local brands like Square’s Sepnil are chasing them.

FBCCI Vice President MA Razzak Khan said the post-independence business environment and facilitation helped local brands grow and Made-in-Bangladesh today is driving the trend.

Bangladeshi companies now have the necessary financial strength and value proposition to offer and, more importantly, the brains to enable a brand to compete and rise to the top.

He believes that a large number of local brands will become stronger at home and abroad in the coming years.

In many industries, including the apparel sector, the market is still not very concerned about brands, but the situation is changing rapidly and local players such as Aarong, Yellow and Sara are investing to get their fair share amidst the the absence of formal retail outlets for global lifestyle brands.

That could make the Bangladeshi market a new battleground for retail brands one day.

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