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Impact of boycott China campaign on consumers uncertain

Industry executives and observers say the ultimate outcome of all such calls will depend on whether there’s a substantial groundswell of anti-China opinion, enough to overcome Indian consumers’ traditional price sensitivity, which is strengthened by falling incomes.

, ET Bureau|
Last Updated: Jun 03, 2020, 11.43 AM IST
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AP
India-China-AP
Sonam Wangchuk, the inspiration behind the 3 IdiotsPhunsukh Wangdu character has urged Indians to boycott Chinese products. His call comes as social media campaigns on boycotting Chinese products have again gathered force in the context of the India-China standoff at the Line of Actual Control. The larger context is recent government calls for promoting domestic industry.

Industry executives and observers say the ultimate outcome of all such calls will depend on whether there’s a substantial groundswell of anti-China opinion, enough to overcome Indian consumers’ traditional price sensitivity, which is strengthened by falling incomes.

The other issue is identifying a ‘Chinese’ product. Tarun Pathak, Associate Director at Counterpoint Research said consumers don’t have as many choices as there was no such thing as pure Chinese product in the globalization era.

Some are more certain about negative impact on Chinese products. “It’s becoming a nationalist issue post the 'Vocal for Local' call given by the Indian Prime Minister earlier this month. Any Chinese company looking to set up operations, will see a delay in decision making”, said a CEO of a leading auto company, who didn’t want to be named.

In auto, MG Motors commenced operations in 2019, while Great Wall and Changan will start production in 2021 & 2022 respectively and BYD has launched EV buses. A leading consultant working closely with some Chinese auto companies says there is a fair amount of negative sentiment for Chinese products currently, which is growing.

Rajeev Chaba, Managing Director at MG Motors, a brand of British origin and owned by Chinese player SAIC mentioned that being local meant remaining relevant through investments, jobs and supporting suppliers through localisation of parts. “The chemistry between brand and community has to be strong”, he added.

Great Wall, Changan & BYD Motors declined to comment on ET’s queries.

Xiaomi India head Manu Jain had recently said that there may be an anti-China sentiment among people at play, expecting things to normalise over time. “People are angry and upset and would want to blame someone, but it may not impact business much”.

Chinese auto players displayed their products at the Indian auto show last February announcing investments over Rs 34,000 crore. “We want to reduce the dependence of our imports from China, not reject their investments in India and are reaching out to all global players to shift investments to India to strengthen our exports," Pankaj Mohindroo, ICEA, chairman said.

Sources told ET that Changan has delayed its India project, citing Covid. However anti China sentiments could have also prompted this decision.

“Consumer sentiments might become low for Chinese products post Covid but quality products manufactured in India, would have takers, said another auto executive.

Nikunj Sanghi, a large automotive dealer mentioned that Indian OEMs depend on at least 26% of components from China which may be impacted as parts cannot be sourced from alternative sources and being difficult to switch suppliers for mass-production items.
(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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