What does it take to build a brand?

The conversation on exports (at least in this column) has been approached from multiple angles the need for research, innovation, diversification, etc. One more question, then, that this column would like to ask is this: what does it take to build a brand?

The question of whether or not we are getting the best value for our products is overlooked when discussing the falling exports particularly garments. Big multinationals like Reebok or Adidas will source a t-shirt from a local firm for peanuts and sell it at a price umpteen times higher. This isnt exactly news; most brands source their products from developing countries. The manufacturers in these developing countries find themselves on the receiving end of a bad bargain. The question is, how can Pakistan have an Adidas of its own?

Surely, Pakistan has some renowned textile brands to its name like Gul Ahmed, Nishat Linen, and Khaadi to name only a few. But these are few and far between, and when it comes to international presence, they can mostly be found in UAE or Saudi Arabia markets that are home to Pakistani expats. As such, any Pakistani brand has yet to really penetrate any market outside its own. BR Research spoke to a number of industry pundits for some answers.

Former KCCI President, Majyd Aziz told BR Research that Pakistani brands do not have the critical mass to make it to foreign markets. There is some international e-commerce, but physical presence is a rarity. The problem, it seems, is the enormous investment required to establish a brand. To that end, TDAP can be criticised for not doing more. The Warehousing Scheme was a positive measure in one of the Trade Policies that didnt really take off. As per the scheme, exporters would identify the destination country where they wanted a warehouse and the government would support the rent of the warehouse for such and such time. Like most things in our trade policies, this has gone largely unheard of. Mr. Aziz suggests that the textile associations can form a collective, have a common brand, in a common locality, and share the cost.

But before that, let it be known that branding is a science of its own. In an interview with BR Research (see Fridays Brief Recording), Dr. Ravi Yatawara of the World Bank mentioned that being a good manufacturer does not necessarily make one a good brand maker, since that is an entirely different skill set altogether one that seems lacking in Pakistan. On top of that, Dr. Yatawara underscored the need for strong relationships to facilitate investments; investments that could be used for branding. Moreover, the need for an efficient logistics system and knowing the latest trends is paramount. Finally, he mentioned risk as a detriment to investment, and the government needs to do more to address the risk/high costs.

Local economist Dr. Faisal Bari opines that creating a brand requires time, heavy investment in the form of a huge fixed cost even if one does not set up manufacturing, it would be in the form of warehousing, marketing, brand creation and comes with great risk. Its a big decision, and the government needs to work to mitigate the risk/costs. Again, Pakistan only has a handful of big names that can actually take the game outside, and even they would be averse to the risk of a failed brand. He mentions the fact that there is no cohesive industrial policy in the country something this column will take up later.

Finally, former Advisor to PM on Textile, Dr. Mirza Ikhtiar Baig gave the example of China and its state-owned brand incubator that helped a number of businesses develop indigenous brands, some of which went abroad as well. Such initiatives are missing in Pakistan. For now, we are only selling unmarked, generic garments, and even there we are having trouble.