Calls for boycott of Chinese products amid Sino-India border tension may be trending on social media, but these are yet to impact sales of smartphone and consumer durable products from the stables of companies like Xiaomi, Realme, and Haier, according to industry executives.
While companies declined to comment on the issue, senior executives at many of these Chinese firms said there has been no impact on sales yet.
One of the senior leaders at a smartphone company, who did not wish to be named, said there was pent-up demand for phones because people are working and studying from home amid the COVID-19 pandemic, and many firms have had to resort to expensive imports to meet the spurt in demand.
Another executive said Chinese firms were keeping a close watch on the developments, and monitoring the situation on the ground as well as on social media.
On Twitter, topics like 'Boycott China', 'Go China', and 'Go Chinese Go' were trending as killing of 20 Indian soldiers in a violent clash with the Chinese army in Ladakh's Galwan Valley stirred anti-China sentiment among people.
Large smartphone market
Industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) said sentiments were being shaped in consumers' minds through various social media platforms and other channels over recent developments that could reflect in the purchase behaviour.
"Consumers are getting messages through various social media platforms and they are taking decisions, and these emotions would result finally in purchase behaviour. It is quite expected. We will see that over a period of time," CEAMA President Kamal Nandi said.
Pankaj Mohindroo, Chairman of India Cellular and Electronics Association (ICEA), said it is no secret that a substantive part of India's supply chain has its roots in China.
"Efforts are under way to enhance self-dependency over the past few years. We should focus on building strong capabilities...There is no impact (of the protests)...We have been focusing on enhancing production in India, and now we are promoting Indian champions, by 2025, we will have strong Indian companies in mobile phone and component segment," he said.
Interestingly, four of the top five smartphone brands in India (Xiaomi, Vivo, Realme and Oppo) are from China, and accounted for almost 76 percent share of the 32.5 million smartphones shipped in India in the March 2020 quarter, according to IDC data.
South Korea's Samsung, which ranked third and cornered 15.6 per cent share of shipment in the said quarter, is the only non-Chinese firm in the top five sellers.
India is the second largest smartphone market after China and clocked a shipment of 152.5 million smartphones in 2019.
"We believe within smartphones Indian users don't have much choice as 81 per cent of the smartphone shipments in Q1 2020 were from Chinese smartphone players (up from 67 per cent in March 2019 quarter). Share of local OEMs is now at 1 per cent and Samsung, Apple is the only strong non-Chinese alternatives available," Counterpoint Research Associate Director Tarun Pathak said.
Smartphone shipments in India are expected to decline by 10 per cent in 2020 due to coronavirus pandemic, according to Counterpoint Research.
Pathak said labelling a product in the era of globalisation was also difficult as a product is made of different components sourced across regions. For consumers, it will be a decision made more of brand perception and brands will be very careful to distance themselves from these sentiments, he added.
"That is why if you see in India, almost all the leading players are quite vocal about their 'India operations' and are likely to go aggressive by announcing their contribution, new incentives, providing jobs in manufacturing and scaling local R&D to focus on the importance of India as a market to them," he emphasised.
A Chinese consumer durables maker noted that it had invested thousands of crores of rupees in setting up manufacturing facilities in India to cater to the local demand, and almost 90 per cent of its products sold in the country are manufactured locally.
Carrier Midea India Managing Director Krishan Sachdev said the company is "run more like an Indian company with values of an Indian company", even though it is managed by Chinese company Midea Corporation.
Carrier Midea India - which is a joint venture between US-based UTC Climate Control & Security and Chinese Midea Group - said it did not expect any major impact on its business.
"We are 100 percent local manufacturing company. The ACs that we sell here, whether it is Carrier or Midea branded, are locally manufactured. We do buy some components from other countries like China, which everyone else also does but we are more local than another company," Sachdev said.
CEAMA's Nandi noted that while new capacity has been added by various players, the issue still remains in components where India is largely dependent on imports that come mainly from China.
"There is a need to develop an ecosystem in this country, and the industry is working with the government towards that. But it would take a couple of years," he said adding that there is a need to look for "China-plus-one" strategy for components.
"We can look at countries like Thailand, Vietnam and Korea as alternative destinations for components," he said.
Counterpoint's Pathak pointed out that identifying an app by the source of origin is easy and these sentiments can be more strong in such categories than in a pure hardware segment.
(Edited by Teja Lele Desai)
Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.
Link : https://yourstory.com/2020/06/boycott-china-trends-online-galwan-valley
Author :- Press Trust of India ( )
June 19, 2020 at 01:13PM
YourStory