India China App Ban: From mobile handset players to apps; what do Chinese brands need to do to douse the fire

Besides apps, Chinese brands have been slowly carving a space for themselves in the Indian market.

The ban on Chinese apps added to the Indian government’s ‘local for vocal’ campaign has led to several companies to react in different ways. For instance, last week smartphone company Xiaomi has started to cover its retail store facades with a new branding — that is, ‘Made in India’ logo in white colour. A move, brand experts believe may have been made in haste. According to Dip Sengupta, chief growth officer and region head- North, Creativeland Asia, this is not the time to be proactive and aggressive about brand building. “The key thing here is authenticity. Brands need to be quiet given the current ecosystem rather than forcing the issue. Actions undertaken by Xiaomi will turn out to be counterproductive,” he said. The Government of India on June 29, 2020 banned 59 Chinese apps including TikTok, SHAREit, UC Browser and Shein.

Besides apps, Chinese brands have been slowly carving a space for themselves in the Indian market. Case in point being the smartphone sector wherein Q1, 2020, Chinese phone companies accounted for 50% of market share in India, as per Counterpoint’s report. The reality we need to face is that Chinese brands and electronic components have a stranglehold on our economy, Arijit Ray, co-founder and managing partner, Paperboat Brandworks told BrandWagon Online. “More than 70% of the components in mobile phones are from China. A large part of the components in other electronic items also come from China. The Pharmaceutical industry is heavily dependent on Chinese imports. Whereas, the total export to India from China accounts for only about 2-3% of its total export bill. So China is clearly insulated. But India is not,” he added.

Industry observers feel that this is a temporary phase and the scene will soon change, as these companies offer products at an affordable rate. According to Ashish Khazanchi, managing partner, Enormous Brands while social media activism, virtual signalling and trend flagging is a collective calling, at an individual level, people are looking for value and one cannot deny the fact that Chinese brands provide consumers with exactly the same at a great price point, “There will be no impact on Chinese brands in that sense unless a regulatory mechanism is put in place. Case in point is — the recent launch of Chinese smartphones on e-commerce platforms,” he added.

Interestingly, for a few TikTok’s declaration on security and privacy is the right step towards building a bridge. As per Debraj Tripathy, advertising consultant, the key here is to acknowledge as well as underline the brand’s efforts which will further enable it to build credibility and authenticity in the long-run. In a statement issued on Tuesday, TikTok stated that the platform continues to comply with all data privacy and security requirements under Indian law and has not shared any information of our users in India with any foreign government, including the Chinese government.

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