Since the start of the coronavirus pandemic, China is causing problems for almost every region across the world, especially for India. Whether it’s COVID-19 attack or border tension, the Chinese are doing everything they can to bring the Indian economy to its knees. But now, because of the recent border tension between China and India, there have been calls across the board to boycott “Made in China” products and Chinese brands. The media platforms are helping in amplifying the narrative. But, if we calculate the revenue spent by Chinese brands in India, banning them would harm the advertising revenue of India at a larger scale.
According to industry executives, Sino-India border tension and #BoycottChineseProducts may be trending on social media but, it’ll not impact sales of consumer durable products and smartphones manufactured by companies like Xiaomi, Haier, and Realme. Although the companies declined to release a statement, the senior executives of some Chinese firms confirmed it will not impact their sales.
Facts & Figures about Advertising Revenue of India
- The Chinese brand Vivo spent Rs 700 crore last year to rank 7th in 2019 from rank 9th in 2018.
- In 2018, Vivo spent Rs. 650 crore to rank in the top 10 advertisers in India.
- In 2019, another Chinese brand Oppo came into light by spending Rs. 600 crore to rank in the top 10 advertisers list.
- Xiaomi spent around Rs 200 crore on advertisements in 2018 to rank in the top 50 advertisers list. In 2018, only Vivo ranked in the top 10 advertiser’s list, but in 2019, the number jumped to two with the entry of Oppo.
- The top 50 brands spent 78% of their budgets on digital and television advertisements.
- In IPL 2019, the biggest advertiser in the 1st week was Oppo, and in IPL 2018, it was Vivo.
- Vivo retained IPL’s title sponsorship in 2019 with a deal size of Rs 2199 crore. The company will pay the amount over five years to BCCI.
- Five companies that applied for the IPL title sponsorship bid were all handset makers such as Vivo, Intex, Oppo, Motorola, and Xiaomi.
- In 2016, Pepsi pulled out from its 5-year deal, and after that, Vivo picked up the title sponsorship for the next two years by spending Rs 200 crore.
- Currently, the annual payment for title sponsorship by Vivo to BCCI is Rs. 440 crore.
The above figures show how much Chinese brands have contributed to the advertising market revenue of India. If we boycott these brands right now, it will gradually decrease the economy rate. And now with other Chinese brands like Great Wall, etc. planning to set up their businesses in India, the Chinese marketing budget will probably Skyrock.
Mobile Market of India
Right now, ‘Go Chinese Go,’ ‘Boycott China’ and ‘Go China’ is trending on Twitter. It is easy said than done. Following are some facts about Indian Mobile Market:
- Four out of the top five smartphone companies in India are from China, such as Oppo, Xiaomi, Realme, and Vivo. According to IDC data, they account for almost 76% share of the 32.5 million smartphones shipped in the country in March 2020.
- Samsung, a South Korea based company, is the only non-Chinese firm that acquires 15.6% share of shipment and ranks 3rd in the top five tallies.
- After China, India has the 2nd largest smartphone market in the world. In 2019, India clocked a shipment of 152.5 million smartphones. In 2020, there will be a 10% decline in smartphone shipments due to coronavirus pandemic.
- Around 80% of the top 10 spenders in the mobile category are the Chinese brands like OnePlus, Oppo, Realme, Xiaomi, Vivo, etc.. Indian brands like Karbonn and Micromax are already left behind by these brands.
Except for Samsung and Apple, every brand is struggling against Chinese smartphone brands right now. We are talking about boycotting Chinese products and brands but, are we ready right now? The answer is, people, don’t have a base to rely on.
If we talk about other brands, there’s a little bit of China in every service and product around us. Some of the companies in India are running in collaboration with Chinese brands. For example, Carrier Midea India. It runs like an Indian company but, it’s a joint venture between US-based UTC Climate Control & Security and Chinese company Midea Corporation.
There are plenty of examples like this. Uninstalling an app and using its alternative is very easy as compared to getting rid of a service, or a device from a consumer’s viewpoint. You might not know but, there would probably be a component in a device you are using, even though if it’s not Chinese.
There are brands managed by Chinese firms, and then there are brands outsourcing from China. If India wants to be a self-independent country, then there’s a need to create an ecosystem in which the government and industry can work together to achieve that goal. It would take a couple of years, but we should develop strategies to manufacture in-house components without outsourcing raw material from China. Korea, Thailand, and Vietnam can be considered as alternative destinations if India has to import raw material.