The most transitional shifts in Indian PR: One acquisition at a time - Part 1

The past two decades have seen the public relations industry in India undergoing a fascinating transformation. Global PR giants are no longer bystanders, but active participants, shaping the narrative through strategic acquisitions and independent ventures. Economic liberalization opened new gates of opportunities and partnerships for global giants to test the Indian waters. This influx of international players, flush with cash and an eagerness to tap into one of the ever-growing markets, has changed the face of Indian PR.In this two-part series, Adgully will delve into the dynamic shifts in India’s PR industry as international giants enter the playing field through strategic acquisitions and ventures. We will explore the impact on the industry, the opportunities and challenges it presents, and what it means for the future, particularly for mid-sized firms.Major dealsLet’s take a look at the noteworthy deals in the past two decades:2005: Burson Marsteller’s acquisition of Genesis PR. This was one of the early significant acquisitions, marking the entry of a major international player into the Indian market.2005: Edelman’s acquisition of a 50% stake in R&PM. Led by Roger Pereira, this move was significant for Edelman’s strategy in India.2007: MSL’s acquisition of Hanmer and Partners. Another major deal that helped an international firm expand its footprint in India. In 2012, Hanmer MSL re-branded itself as MSL India to better align with its parent company. This re-branding coincided with the company's expansion plans for the next three years, focusing on strategic communication, digital communications, and talent development.2008: Sampark Public Relations formed a strategic partnership with New York-headquartered Ketchum. This collaboration enabled Sampark to leverage Ketchum’s extensive global network while maintaining its strong local expertise.2014: Ketchum increased its stake in Ketchum Sampark, acquiring a majority interest in the firm.2013: Sixteen years after initially acquiring a 40% stake, Weber Shandwick, a global PR firm under the Interpublic Group (IPG), acquired the remaining 60% stake in Corporate Voice from MAA.2015: Cohn & Wolfe’s acquisition of 6 Degrees PR. This acquisition further illustrates the trend of international firms seeking growth through local partnerships.2016: Dentsu Aegis Network, a global media and communications company, acquired Perfect Relations Group. This acquisition strengthened Dentsu’s PR offerings in India.2018: WE Communication’s acquisition of Avian WE. This acquisition allowed WE Communications to strengthen its presence in the Indian market.2022: Marketing and communications agency Finn Partners acquired SPAG.2023: Havas, a global communications network, acquired Indian PR firm PR Pundit. This expanded Havas’ PR capabilities in India and marked the entry of Havas Red, Havas’ global PR network, into the Indian market. PR Pundit was rebranded as PR Pundit Havas Red.2023: Kaizzen secured an undisclosed funding from Maven Corporate Advisors in 2023. This investment has reportedly led to a shift in the company’s ownership structure.<img src='\3587bb7423d940bcc585637359875879.jpeg' class='content_image'>A double-edged swordThe recent acquisitions by international PR firms in India are a double-edged sword for the industry, presenting both opportunities and challenges, especially for mid-sized firms.The acquisition of Indian PR firms by international entities has been a consistent trend for over two decades, reflecting the long-standing recognition of India’s vibrant market potential, points out Vikram Kharvi, CEO, Bloomingdale PR.Despite this, Kharvi adds, the largest PR agency of India continues to be an independent Indian firm, showcasing the robustness of local expertise and the ability to cater to the unique nuances of the Indian market. He reckons that the influx of global players will further expand the PR landscape, bringing in advanced methodologies, global best practices, and a broader appreciation for strategic communications across various industries.“Maven Corporate Advisors’ recent investment in Kaizzen highlights an intriguing development: advisory firms are now valuing PR as a vital component of their service offerings. This move can be transformative for the industry, signaling a shift towards more integrated and comprehensive business solutions. For mid-sized firms like Kaizzen, this presents an opportunity to leverage additional resources, enhance their service portfolio, and compete more effectively on a larger scale,” says Vikram Kharvi.However, he adds, this also introduces challenges. Mid-sized firms must navigate increased competition from both established international giants and newly empowered local firms. Maintaining competitive differentiation will require a focus on deep local insights, agility, and the ability to deliver personalized, high-touch service. Additionally, these firms will need to invest in talent and technology to stay ahead in an increasingly sophisticated market.There is certainly no doubt that Indian PR firms’ acquisitions by foreign firms help bring global processes, perspectives, knowledge and expertise to the former, opines Rishi Seth, Founder and CEO, Evoc Communications.“Over a period of time, these advancements permeate through their peers including independent agencies as well, and end up raising the service delivery benchmarks for the entire PR industry. For independent mid-tier firms with adequate capital, perhaps a big opportunity lies in building world-class systems and processes through partnerships with academia and third-party consulting firms. This approach can help build some unique and differentiated capabilities that are necessary to compete effectively with the global network firms,” Rishi Seth adds.Acquisitions by global networks are hardly a new phenomenon in the Indian PR industry; we’ve been witnessing them for at least a couple of decades, says Ashraf Engineer, Head of Strategy, Ideosphere. Having said that, the fact that networks are still looking to invest in the Indian market shows how vital it is to the global PR industry.According to Engineer, these investments certainly impact the dynamics here because it means the further introduction of global best practices, more multinational clients extending their partnerships through the buyers to India, and it means more money for skills enhancement and exposure to international markets. It also means more jobs and geographies within India being serviced.“Just look at what acquisitions in India did for global giants like Publicis Groupe and WPP. At a time when global growth was slowing a few years ago, it was the Indian and Chinese agencies in their portfolio that kept the networks growing. Simultaneously, the firms these networks acquired grew from strength to strength. The acquisitions also facilitated and accelerated the shift towards digital and data. As far as investments in mid-sized firms are concerned, it’s what will fuel their evolution and expansion. As the Indian economy expands, marketing services – I regard the PR industry to be part of this sector – will play an increasingly vital role for brands. The demand for strategy formulation, messaging structures and outreach in the form of PR, advertising, below-the-line offerings and activation will only balloon. So, we need more sizable players in this space for the market to expand and evolve. The investments in small and mid-sized firms will fuel that,” he explains.The Indian PR landscape has been witnessing a surge in acquisitions by international firms, which has significantly impacted the industry’s dynamics, says Akshara Lalwani, Founder and CEO, Communicate India.According to her, these acquisitions present a mixed bag of opportunities and challenges, especially for mid-sized firms like Kaizzen, which recently secured funding from Maven Corporate Advisors.According to Lalwani, the opportunities include:Enhanced capabilities and global reach: With international firms bringing in advanced tools, global best practices, and a wider network, mid-sized firms can leverage these resources to enhance their capabilities and reach. This funding and the potential partnerships it brings can help firms like Kaizzen expand their service offerings and client base.Innovation and learning: International acquisitions often introduce new perspectives and innovative strategies. Mid-sized firms have the opportunity to learn from these global players, adopt new technologies, and stay ahead of industry trends.Market expansion: The influx of international firms underscores India's growing importance in the global PR market. This can attract more international clients to Indian PR firms, providing opportunities for growth and diversification.The entry of international PR firms through acquisitions is certainly impactful, says Kulpreet Freddy Vesuna, Founder & Managing Director, Impact Public Relations. The effect largely depends on the service packages these international firms introduce, he adds.“Indian clients typically seek comprehensive, cost-effective solutions. If these international firms can provide this balance, it could pose significant competition for local firms. That said, there is also a positive side. Indian PR firms are innovating and putting their best foot forward to drive change and evolve with the market. The industry will likely see consolidation, but it will remain dynamic, requiring Indian firms to stay agile and cautious. Ultimately, the presence of international firms could drive higher standards and push local firms to continuously improve and adapt, shaping a more robust and competitive PR landscape in India,” Kulpreet Freddy Vesuna says.(Tomorrow: Part 2 of the report will delve into how the entry of international PR firms through acquisitions is impacting independent and mid-sized PR firms in India. It will also explore how this consolidation wave is shaping the future of the Indian PR industry.)

Kaizzen secures funding, eyes growth in booming Indian PR market

Leading Indian PR firm Kaizzen, known for its integrated communications approach, has secured funding from Maven Corporate Advisors in 2023. This investment has led to a shift in the company's ownership structure, with Maven acquiring a majority stake, according to sources. Vineet Handa, founder and managing director of Kaizzen, retains a significant share and remains at the helm, with no plans for his departure. Notably, Puja Handa has stepped down as director, while new board members Karan Singh Surjit and Krupa Dashsathbhai Limbachiya have been appointed. While the specific nature of Maven's involvement beyond financial backing remains unclear, sources indicate the investment is aimed at fueling Kaizzen's ambitious growth plans.Kaizzen has set its sights on doubling its turnover in the 2023-2024 fiscal year compared to the previous year, aiming to reach a target of ?50 crores. The secured funds will be strategically deployed to expand its service offerings in key areas like government relations and investor relations. Additionally, the company plans to leverage the investment to establish a presence in Dubai, further solidifying its regional footprint.Kaizzen's funding announcement comes amidst a significant period of consolidation within the Indian PR landscape. Over the past two decades, the liberalization of the Indian economy has seen a steady influx of international PR firms seeking a foothold, either through independent ventures or acquisitions of local players. Examples include Burson Marsteller's acquisition of Genesis PR in 2005, MSL's purchase of Hanmer and Partners in 2007, Cohn & Wolfe's acquisition of 6 Degrees PR in 2015, and WE Communication's acquisition of Avian WE in 2018. Notably, Edelman also acquired a 50% stake in R&PM, led by Roger Pereira, in 2005.India presents a unique scenario in the global PR market. Adfactors PR, an independent firm, stands out as the undisputed leader in terms of size. This independence stands in contrast to the challenges faced by international network firms struggling to achieve significant growth in the Indian market. As a result, India is rapidly emerging as a hotspot for these firms seeking expansion opportunities. Mid-sized and independent firms like Kaizzen are well-positioned to capitalize on their agility, creativity, and ability to better align their services with the working cultures of Indian companies. This unique offering could prove to be a major advantage in the competitive years to come.