Article

Tupperware everywhere

The global food-storage container maker and distributor has scripted a remarkable success story in India by smartly adapting its business model for the world's second most-populated nation.

著者：Ashish Singh and Satish Shankar

First published on 6月 11, 2010
min read


Multinationals seeking a piece of the expanding Indian economic pie would do well to study Tupperware Brands Corporation. The global food-storage container maker and distributor has scripted a remarkable success story in India by smartly adapting its business model for the world's second most-populated nation. Let's look at the facts. Tupperware currently is a leading brand in the kitchenware market in India, coming from nowhere in 1996 when it entered the country, and growing at a compounded annual rate of 30 percent ever since. In fact, according to Euromonitor, the company's expansion in India also fuelled the growth of the overall kitchenware market, which increased from 6.7 billion rupees in 2003 to over 12 billion rupees in 2008-a 12 percent annual rise. In the same period, Tupperware has gone on to become a 'top of mind' brand for many middle-class households across India's main metros, according to a survey undertaken by The Nielsen Company in 2008. Today, Tupperware is rated among India's top 3 percent of brands across all categories and segments by Superbrands, a well-respected and independent organization. How did Tupperware achieve such success in one of the largest and most exciting emerging markets? It followed five key strategic principles which can serve as guidelines for companies looking to win in India. Focus on a core business/category Companies entering a large market like India need to target leadership in a category that overlaps with a global priority or a core area. When you enter a new market in a sector that is your core business, you bring in innovation, resources, the weight of your global organization, and learning from other markets. Tupperware did just that: it came to India with a clear agenda to develop a category on which its global business was based—kitchenware. This allowed the company to give its India plan the attention, expertise and support it needed. This focus helped change consumer behaviour: Tupperware converted many Indian consumers from traditional metal food containers to plastic ones that catered to local food habits. It also allowed the company to build a strong distribution network by popularizing "Tupperware Parties" involving sharing of recipes, cooking advice and health tips among Indian housewives. As it put in place a powerful all-women salesforce, Tupperware developed the entrepreneurial skills of thousands of Indian homemakers. In the process, the company empowered these women to take decisions about household expenditures and family lifestyles, as they contributed to their families' incomes. Today, Tupperware India operates in 59 cities. Given the popularity of its business concept with urban middle-class women, the company is on track to increase its sales force to 100,000 in the next couple of years. Adapt products but maintain global brand integrity Smart companies adjust their product line to meet local needs in emerging markets but without losing their brand cachet. Tupperware has done that, maintaining a "premium mass" image. Striking this balance is a critical success factor in emerging markets like India and China where customers aspire for a certain brand status but at "good enough" quality and affordable prices. To compete more effectively, Tupperware has localized its pricing strategy, making its products more affordable to more Indian customers, but, at the same time, has not compromised on quality. It maintains lower costs by producing locally, as seen in its state-of-the-art plant in Dehradun, which caters exclusively to the Indian market. Product localization via ground-up design and renovation have been crucial catalysts in Tupperware's growth in India. Its India innovations include the classic 'roti keeper', the 'masala (spice) box', and its "multi-cook" product. Last year, the company launched a new range of long-lasting, eco-friendly bottles for everyday water storage needs which, given their durability, reduce the load on landfills. A classic case of reverse innovation, the Eco Bottle is now being exported to Europe and the US and has become a global blockbuster. Understand local costs Among the first things MNCs need to do as they survey an emerging market is to understand how local players make money at "insane" prices. To compete, they have to reassess their entire business model to effectively manage costs beyond overheads and other discretionary costs. One way is to carefully consider—and adapt if required—their product mix, the raw materials they use, and the type of packaging. For its part, Tupperware India used a locally developed mold for its Eco Bottle that helped it compete with lower cost rivals while, at the same time, maintaining the product's premium image. What MNCs should not do is to try to compete with local companies at very low price points. Instead, they should look at making money by offering products at attractive prices that cater to local customer needs. Besides Tupperware, look at how McDonald's has competed successfully with Indian fastfood chains, standalone restaurants and street-food stalls. It has Indianized 75 percent of its menu, creating local adaptations of its burgers like the reasonably priced vegetarian McAloo Tikki Burger. Leverage local talent Smart companies not only develop local talent but offer them great opportunities—locally and globally. They realise local talent often has superior consumer insights and a better understanding of domestic business practices. They also groom rising stars for global leadership positions. For instance, the current MD of Tupperware India, Asha Gupta, is an Indian. Gupta joined Tupperware in 1997 and rose through the ranks, ultimately heading marketing for Scandinavia and the Baltics before taking over the top job in India in 2005. Developing local talent and giving them responsibility at the domestic and international levels pays off as it empowers local management to tailor offerings for domestic markets, while keeping in line with high-level global strategy. Stay committed As part of building a strategic foundation in a new market—especially in a challenging one like India with huge growth potential—MNCs should maintain a long-term commitment and resist the temptation of pulling back in tough times. Leading companies commit people and other resources—financial, technological, infrastructural—for sustained time-periods. Tupperware, for instance, has stayed the course since 1996, confident that India would become one of its fastest-growing emerging markets, a vision that has now become a reality. The recent global recession and consequential slowdown in India did not hurt the company. In fact, Tupperware India grew revenues strongly in 2009 and contributed 29 percent of the company's overall local currency growth among Asia-Pacific emerging markets, which include China, Indonesia and Malaysia. Emerging markets now account for 54 percent of global sales and helped the company post a robust 20 percent growth in revenues in the first quarter of 2010 to $557 million versus the same quarter in 2009. In India, the downturn led to more women joining the company's sales force to supplement family income, boosting sales. Resource to potential Tupperware has done what all winners should do in markets such as India: Provide resources—human, financial, infrastructural, and technological—according to the potential scale and performance of a targeted segment and not base allocation of resources on its historical performance. One reason is that many consumer segments are still underdeveloped: smart players unleash untapped demand and push growth in targeted segments to a level that has little or no bearing to historical performance. Just look at how PepsiCo and The Coca-Cola Company grew the Indian soft-drink market (including carbonates, fruit juice, bottled water, functional drinks, tea and coffee) after PepsiCo entered in 1989 and Coca-Cola re-entered in 1993. According to Euromonitor, in the period between 1999 and 2009, the Indian soft-drink market grew 261 percent to 5.01 billion litres from 1.4 billion litres, as both MNCs ramped up their marketing, production and distribution efforts. In this regard, Tupperware's marketing efforts have been directed at resourcing to the potential of the market through multiple initiatives. From media tie-ups, advertorials, partnerships with Bollywood production houses, and tie-ups in India with top brands such as Samsung, P&G or American Express, Tupperware has kept its brand resonating in consumers' minds in urban areas where it is still developing the market. It plans to focus on rural areas after it further builds its presence in smaller cities and towns. By focusing on its core, adapting to local conditions, capitalizing on domestic talent, staying committed, and providing resources to meet the potential of a growing market, Tupperware has won big in India. Following these steps can help other companies compete in BRIC (Brazil, Russia, India, and China) nations, which accounted for around 45 percent of global growth since 2007 and may make up nearly half of global consumption in 2010. Ashish Singh is the managing director of Bain & Company, India, and leads the firm's Retail and Strategy practices in the country. Satish Shankar leads Bain's Consumer Products practice for Southeast Asia and is based in Singapore.

Multinationals seeking a piece of the expanding Indian economic pie would do well to study Tupperware Brands Corporation. The global food-storage container maker and distributor has scripted a remarkable success story in India by smartly adapting its business model for the world's second most-populated nation.

Let's look at the facts. Tupperware currently is a leading brand in the kitchenware market in India, coming from nowhere in 1996 when it entered the country, and growing at a compounded annual rate of 30 percent ever since. In fact, according to Euromonitor, the company's expansion in India also fuelled the growth of the overall kitchenware market, which increased from 6.7 billion rupees in 2003 to over 12 billion rupees in 2008-a 12 percent annual rise.

In the same period, Tupperware has gone on to become a 'top of mind' brand for many middle-class households across India's main metros, according to a survey undertaken by The Nielsen Company in 2008.

Today, Tupperware is rated among India's top 3 percent of brands across all categories and segments by Superbrands, a well-respected and independent organization. How did Tupperware achieve such success in one of the largest and most exciting emerging markets? It followed five key strategic principles which can serve as guidelines for companies looking to win in India.

Focus on a core business/category

Companies entering a large market like India need to target leadership in a category that overlaps with a global priority or a core area. When you enter a new market in a sector that is your core business, you bring in innovation, resources, the weight of your global organization, and learning from other markets.

Tupperware did just that: it came to India with a clear agenda to develop a category on which its global business was based—kitchenware. This allowed the company to give its India plan the attention, expertise and support it needed. This focus helped change consumer behaviour: Tupperware converted many Indian consumers from traditional metal food containers to plastic ones that catered to local food habits. It also allowed the company to build a strong distribution network by popularizing "Tupperware Parties" involving sharing of recipes, cooking advice and health tips among Indian housewives. As it put in place a powerful all-women salesforce, Tupperware developed the entrepreneurial skills of thousands of Indian homemakers. In the process, the company empowered these women to take decisions about household expenditures and family lifestyles, as they contributed to their families' incomes. Today, Tupperware India operates in 59 cities. Given the popularity of its business concept with urban middle-class women, the company is on track to increase its sales force to 100,000 in the next couple of years.

Adapt products but maintain global brand integrity

Smart companies adjust their product line to meet local needs in emerging markets but without losing their brand cachet. Tupperware has done that, maintaining a "premium mass" image. Striking this balance is a critical success factor in emerging markets like India and China where customers aspire for a certain brand status but at "good enough" quality and affordable prices. To compete more effectively, Tupperware has localized its pricing strategy, making its products more affordable to more Indian customers, but, at the same time, has not compromised on quality. It maintains lower costs by producing locally, as seen in its state-of-the-art plant in Dehradun, which caters exclusively to the Indian market.

Product localization via ground-up design and renovation have been crucial catalysts in Tupperware's growth in India. Its India innovations include the classic 'roti keeper', the 'masala (spice) box', and its "multi-cook" product. Last year, the company launched a new range of long-lasting, eco-friendly bottles for everyday water storage needs which, given their durability, reduce the load on landfills. A classic case of reverse innovation, the Eco Bottle is now being exported to Europe and the US and has become a global blockbuster.

Understand local costs

Among the first things MNCs need to do as they survey an emerging market is to understand how local players make money at "insane" prices. To compete, they have to reassess their entire business model to effectively manage costs beyond overheads and other discretionary costs. One way is to carefully consider—and adapt if required—their product mix, the raw materials they use, and the type of packaging. For its part, Tupperware India used a locally developed mold for its Eco Bottle that helped it compete with lower cost rivals while, at the same time, maintaining the product's premium image.

What MNCs should not do is to try to compete with local companies at very low price points. Instead, they should look at making money by offering products at attractive prices that cater to local customer needs. Besides Tupperware, look at how McDonald's has competed successfully with Indian fastfood chains, standalone restaurants and street-food stalls. It has Indianized 75 percent of its menu, creating local adaptations of its burgers like the reasonably priced vegetarian McAloo Tikki Burger.

Leverage local talent

Smart companies not only develop local talent but offer them great opportunities—locally and globally. They realise local talent often has superior consumer insights and a better understanding of domestic business practices. They also groom rising stars for global leadership positions. For instance, the current MD of Tupperware India, Asha Gupta, is an Indian. Gupta joined Tupperware in 1997 and rose through the ranks, ultimately heading marketing for Scandinavia and the Baltics before taking over the top job in India in 2005. Developing local talent and giving them responsibility at the domestic and international levels pays off as it empowers local management to tailor offerings for domestic markets, while keeping in line with high-level global strategy.

Stay committed

As part of building a strategic foundation in a new market—especially in a challenging one like India with huge growth potential—MNCs should maintain a long-term commitment and resist the temptation of pulling back in tough times. Leading companies commit people and other resources—financial, technological, infrastructural—for sustained time-periods.

Tupperware, for instance, has stayed the course since 1996, confident that India would become one of its fastest-growing emerging markets, a vision that has now become a reality. The recent global recession and consequential slowdown in India did not hurt the company. In fact, Tupperware India grew revenues strongly in 2009 and contributed 29 percent of the company's overall local currency growth among Asia-Pacific emerging markets, which include China, Indonesia and Malaysia. Emerging markets now account for 54 percent of global sales and helped the company post a robust 20 percent growth in revenues in the first quarter of 2010 to $557 million versus the same quarter in 2009. In India, the downturn led to more women joining the company's sales force to supplement family income, boosting sales.

Resource to potential

Tupperware has done what all winners should do in markets such as India: Provide resources—human, financial, infrastructural, and technological—according to the potential scale and performance of a targeted segment and not base allocation of resources on its historical performance. One reason is that many consumer segments are still underdeveloped: smart players unleash untapped demand and push growth in targeted segments to a level that has little or no bearing to historical performance. Just look at how PepsiCo and The Coca-Cola Company grew the Indian soft-drink market (including carbonates, fruit juice, bottled water, functional drinks, tea and coffee) after PepsiCo entered in 1989 and Coca-Cola re-entered in 1993. According to Euromonitor, in the period between 1999 and 2009, the Indian soft-drink market grew 261 percent to 5.01 billion litres from 1.4 billion litres, as both MNCs ramped up their marketing, production and distribution efforts.

In this regard, Tupperware's marketing efforts have been directed at resourcing to the potential of the market through multiple initiatives. From media tie-ups, advertorials, partnerships with Bollywood production houses, and tie-ups in India with top brands such as Samsung, P&G or American Express, Tupperware has kept its brand resonating in consumers' minds in urban areas where it is still developing the market. It plans to focus on rural areas after it further builds its presence in smaller cities and towns.

By focusing on its core, adapting to local conditions, capitalizing on domestic talent, staying committed, and providing resources to meet the potential of a growing market, Tupperware has won big in India. Following these steps can help other companies compete in BRIC (Brazil, Russia, India, and China) nations, which accounted for around 45 percent of global growth since 2007 and may make up nearly half of global consumption in 2010.

Ashish Singh is the managing director of Bain & Company, India, and leads the firm's Retail and Strategy practices in the country. Satish Shankar leads Bain's Consumer Products practice for Southeast Asia and is based in Singapore.