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Underdogs Unite: Australia Needs More Challenger Brands

Why aren’t there more challenger brands in Australia? Surely, with our anti-authoritarian nature and unwavering support for the underdog, the Australian consumer should be a magnet for challenger brands seeking disruption.

But the economic reality says otherwise.

The rule of thumb amongst economists is that a market is considered ‘concentrated’ if the largest 4 firms together have greater than one third market share. In Australia, over half of our industries are concentrated, and in many categories – such as beer, banking, baby food, health insurance, department stores, supermarkets, ISPs - the biggest 4 brands have over 80% market share. (Leigh & Triggs, Australian Economic Review, 2017).

Underdogs Unite

With such high levels of concentration, the vast majority of brands in Australia today are challenger brands by default. Case in point: we have 265 registered banks, of which 261 should think themselves challengers to the ‘big 4’. But as the Royal Commission on Banking revealed, collectively that challenge hasn’t been sufficient to disrupt the status quo.

So how do brands better take up the fight?

Challenger Thinking 

The answer is Challenger Thinking. Brands don’t exist in a vacuum and the competitive set is not just a contextual curiosity, but rather an opposing army to be fought. Challenger Thinking is all about being more aggressively competitive – recognising the fundamental truth that consumer choices are relative and that for us to win, someone else has to lose. 

Here are 3 tricks we have developed at VCCP to help brands hone their Challenger Thinking:

Trick 1: Play The Zero Sum Game

Pick a very public fight with the biggest competitor (and your source of market share growth). Famously Apple played this game with ‘Mac vs PC’ and more recently the Samsung Galaxy ‘Ingenious’ campaign shows that even the predator can eventually become prey. An ‘us vs them’ narrative creates a false binary choice for consumers, helping smaller brands transcend all other competitors and become “the alternative option”. ‘Whopper Detour’ from Burger King is another great example of this approach, with consumers not just responding to a price promotion, but to the audacity of very literally taking sales away from a competitor.

Trick 2: Challenge What Not Who

Enable your brand to win by changing the basis of choice in the category. In the UK, Eurostar did this by recognising that the way to compete with air travel is not on speed, but comfort. Closer to home, Aldi brought disruption to Australia’s supermarket duopoly by promising ‘Like Brands, Only Cheaper’. The trick here is to identify and elevate a choice factor that your brand can disproportionately own, changing the category conversation rather than just fighting to be heard.

Trick 3: Be For Someone Not Everyone

Finally, don’t try to be all things to everyone. Instead, find the someone who stands for what you stand for and stand unequivocally with them. A great local example of this approach is the Infrequent Flyer campaign for Tiger Air, which makes not flying often feel like a smart, savvy club you want to be part of. More recently, Nike’s share price growth shows that their very public backing of Colin Kaepernick galvanised many more of their core progressive customer base than it alienated. Finding the right someone isn’t about holding up a literal mirror to the consumer, it’s about finding an attitude that is true for some and aspirational for many. It’s about having the confidence to know who you are not for.

Challenger Thinking can help any brand be more competitive. And pretty much the only thing that economists agree on is that competition is good for consumers. 

So come on Australia, underdogs unite!


By Andrew Holt, CEO of VCCP Sydney