Indian Cola Wars: Can Reliance's Campa Cola Wrestle Away Market Share From Pepsi, Coke?

“Cola wars” is a phrase often used to describe the battle between Pepsi and Coca-Cola to establish dominance over the carbonated drinks market. 

While the fight has been on for decades, sometimes with direct attacks on the other brand, the two giants are now facing Reliance Industries’ Campa Cola brand in India.

Campa Cola’s Second Fight Against Behemoths

This isn’t the first time the Campa Cola brand has fought against the behemoths. Pure Drinks Group, which owned the brand before Reliance, used to control a significant share of the Indian carbonated beverage market earlier. 

In 1977, Coca-Cola’s Indian arm left the market after being asked to sell 60 per cent of its stake to an Indian company and returned only in 1993. 

Pepsi only entered India in 1989, which meant that home-grown Campa Cola had a long time to flourish in the Indian market. However, after Coca-Cola and Pepsi came back, they used their financial might to market and distribute their products throughout India, and Campa Cola lost its market share to these players.

Media Assets and Sports Teams Could Help in Brand Building

Unlike Coke and Pepsi, Campa Cola is probably unknown to most people in the younger generations. 

On the brand-building side, the Reliance group controls highly valued media assets with millions of viewers in India. In addition, it owns several sports media assets and teams. 

Sports and sportspeople have always been a medium of choice for soft drink manufacturers to advertise their products – Red Bull being one of the extreme examples. 

Red Bull has been a sponsor and also a team owner in some extreme sports since it fits in with its brand image as an energy drink. 

Some of India’s top athletes have been featured in advertisements for Pepsi and Coke. 

According to a few reports, there are already talks of advertising Campa Cola through IPL and making Campa Cola the preferred refreshment partner for some teams.

Pricing War on the Cards?

Reliance has often relied on pricing its products lower than competitors in the market, perhaps to appeal to Indian customers who are value-conscious. It appears to be using the same strategy to woo customers to buy its FMCG products. 

Across its FMCG product launches, the company has kept its prices significantly lower than its competitors’ prices. For a few products, it has reportedly launched smaller SKUs (stock-keeping units) than is the general market practice. 

Whether low pricing will be an introductory feature to attract customers or a longer-term strategy remains to be seen. Some media reports have suggested that Coca-Cola has cut prices for entry-level packs.

Reliance’s Strong Distribution Network Would Be Helpful

Over the last two years, Reliance has been acquiring local brands for the launch of its fast-moving consumer goods business. Campa Cola was one of these brands, for which it paid Rs 22 crores. 

Unlike in the past, the lack of money might not be a significant barrier for the Campa Cola brand to grow.

 Besides brand power that accrues from years of effective marketing, business analysts cite Coke and Pepsi’s strong distribution network as a competitive advantage over other players who have tried to enter the soft drinks business. 

Reliance has emerged as a distribution powerhouse in India over the last decade. Apart from its massive portfolio of stores across India, it now has JioMart, JioMart Kirana, and Metro CNC’s business to help it grow its brands’ footprint across B2C and B2B sectors. A giant distribution network would make it easy for Reliance to market its products to customers.

Overall, it appears that Reliance is putting its might behind home-grown brands that it believes can take away share from giants that currently dominate the space. 

So far, some Indian brands like Patanjali have made a place for themselves in the FMCG sector but haven’t been able to take away significant share from larger players despite having lower pricing on some products. But again, none of these players had the distribution strength, customer reach, and financial might that Reliance does today.   

Also Read: Can Reliance’s Big Bet on Local Brands Help It Grab Market Share From Incumbents?