Forbes India 15th Anniversary Special

Stock taking: PhonePe, Upstox and brand extension

Two new-age brands embrace two contrasting approaches to diversify into new categories. While PhonePe creates a new entity, Upstox sticks with brand extension

Rajiv Singh
Published: May 23, 2024 04:38:04 PM IST
Updated: May 24, 2024 10:37:57 AM IST

Stock taking: PhonePe, Upstox and brand extensionMost brands make the mistake of extending the brand name to the new and disparate product and service. Image: Getty Images
 
Whenever brands diversify, they tap into one of the two sets of tried-and-tested marketing buckets. The first is brand extension, and the other is the creation of new brands. Take, for instance, examples of four disparate brands—Amul, Parle, JSW, and Upstox—that opted for brand extension. When dairy major Amul decided to go beyond milk, curd and ice cream, it used its mother brand and ventured into wheat flour, rice, pulses, sugar, spices and tea.
 
Similarly, when confectionery biggie Parle decided to get into contrasting categories—flour and cereals—it used the mother brand. So, you have Parle biscuits, Parle chocolates and Parle atta. Similarly, five years ago, cement-to-steel conglomerate JSW Group opted to sell paints under the same brand: JSW Paints. Fast forward to May 2024. Trading platform Upstox diversified into the insurance business by using the same brand. So, now one can access stocks, mutual funds, IPOs, gold and term life insurance under one roof.
 
Let’s examine the second bucket with the help of three brands: Fevicol, Hero Moto and PhonePe. Pidilite, the maker of Fevicol, entered the paints business by creating a new brand, Haisha. Hero Moto, India’s biggest two-wheeler maker, started selling EVs (electric vehicles) under Vida. Ditto for PhonePe, which recently dabbled into the stock market with a distinct identity: Share.Market.
 
Now, the big question is: Is it easy to pick the right bucket while diversifying? Marketing and branding gurus reckon that most of the brands—legacy as well as startups—err in judgement. So, while JSW, Hero Moto, Fevicol and PhonePe get a thumbs-up from marketing and branding gurus, Upstox, Parle and Amul, they underline, are the odd ones out in extending the brand name for products that are not in sync with their core DNA. “How can Parle be atta?” wonders Ashita Aggarwal, professor of marketing at SP Jain Institute of Management and Research. “Amul has a soul, which is dairy. It can’t be tea and spices,” she underlines. Upstox, she contends, has a strong connotation with stock trading. “The brand has got ‘stock’ in its name. How can it mean insurance?” she adds. “Every brand has a soul, and it can’t be changed,” underlines Aggarwal. In a market where rivals are selling insurance with a clear-cut identity—InsuranceDekho, ACKO, Digit and PolicyBazaar—how can consumers relate to Upstox with insurance, she asks. When it comes to brand extension, one name for similar products or nature—steel, cement and paints—makes sense as the products are used for the same purpose: Construction and renovation. “There is no confusion,” she says.  
 
A brand must represent a specific offering. “Most brands make the mistake of extending the brand name to the new and disparate product and service,” reckons Harish Bijoor, who runs an eponymous brand consulting firm. “And when this happens, brand pomposity steps in,” he says.

Also read: PhonePe launches cross-border UPI payments in Sri Lanka
 
PhonePe, for its part, contends that a discount-broking platform couldn’t have been launched under the parent brand. “Launching Share.Market as a separate entity was a logical decision,” says Ujjwal Jain, CEO of Share.Market. The new entity, he lets on, encompasses a comprehensive range of stocks. “Its research-backed offerings demand significant app space and active investor engagement,” he adds, justifying the need for a separate brand.
 
Meanwhile, Upstox reckons that the vision of ‘investing right’ gels well with insurance. Navigating the insurance landscape is a daunting task, Kavitha Subramanian, co-founder of Upstox, pointed out in a latest media release announcing the foray into the insurance business. “At Upstox, we understand these challenges… our aim is to help customers cut through the noise,” Subramanian underlined. “While we have traditionally been recognised for our offerings in stocks, F&O and mutual funds, our mission is to help India ‘Invest Right’ and build wealth the right way,” the co-founder underlined.
 
Can consumers identify Upstox as an insurance platform as well? Or can Parle Atta catch the imagination of consumers? The debate remains inconclusive. 

 (with additional inputs from Naandika Tripathi)