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Sat, Mar 30, 2002 - Page 21 News List

Sassy commercials enliven soda wars in India

BATTLE OF THE ADS Coca-Cola and Pepsi are mired in a bitter advertising war in the populous nation where they use stars from cricket and the movies to pitch their drinks

BANGALORE , INDIA

With the approach of May and June, the hottest months of the year here, both companies are gearing up their marketing efforts, hoping to expand their reach to larger swaths of the Indian population. That explains their reliance on popular celebrities from India's two abiding passions, cricket and the movies.

So far, their penetration extends to only about 10 percent of the total population, which is 1 billion or more. With about seven in 10 Indians living in rural villages, distribution is a major challenge.

So is affordability.

At 10 rupees (US$0.21) a bottle, soft drinks are luxuries in a country where the average annual income is US$430, and where tea and coffee can be had everywhere for much less. High taxes on soft drinks -- up to 40 percent of the retail price, compared with 15 percent in neighboring Pakistan -- do not help.

In this highly competitive environment, Coke and Pepsi stand toe to toe. Coca-Cola India has 45 bottling plants in the country, and PepsiCo has 44; each has about 800,000 retail outlets, many of which stock both lines. Neither company is willing to discuss financial results in India.

Coca-Cola is hoping for double-digit growth, in part by expanding sales in rural areas.

It plans to add 160,000 new outlets this year, and it is introducing a smaller bottle that will sell for 5 rupees (US$0.10).

But for the moment, both companies are directing ads at the big growth segment of their current market: the urban young, who account for more than half of the estimated 150 million soft drink consumers in India.

"We want to bond with the young through their fashion and their lives," said Nadkarni, of Coke.

The ad war has certainly gotten young consumers' attention.

After Coca-Cola India hired the director of Lagaan to make a commercial, Pepsi signed up Farhan Akhtar, whose debut film, The Heart Wants, was a big hit with young urbanites.

Pepsi's latest coup was to cast one of India's top movie stars, Amitabh Bachchan, and the cricket sensation Sachin Tendulkar in the same ad. Coca-Cola has not yet said how it plans to top that combination, but it is certain to try.

One cloud hanging at the edge of the battlefield is litigation left over from last year's ad battles. In a complaint awaiting a ruling from the Delhi High Court, Pepsi accused Coca-Cola of violating its trademarks and copyrights.

But the case does not seem to have deterred the combatants much.

This year's ad war "is nowhere near over yet," said Rishi of Pepsi.

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