Anti-China sentiment creates opportunity for rival apps, companies3 min read . Updated: 26 Jun 2020, 04:41 PM IST
- 30-40% of customers have expressed unwillingness to buy a Chinese product, showing a leaning for non-Chinese brands such as Samsung
NEW DELHI: The backlash against Chinese companies, following the violent face-off along the border in Ladakh, has opened a window of opportunity for non-China companies be it in electronics or app space.
Mitron, which was launched as an Indian alternative to Chinese short form videos app TikTok, was downloaded five million times in one month of its launch following the backlash. Similarly, retailers have also noticed a surge in interest in gadgets from non-Chinese vendors.
According to a Mumbai-based large mobile and electronics retailer, 30-40% of customers have expressed reluctance in buying a Chinese product. Buyers are showing a leaning towards non-Chinese brands such as Samsung, he added.
Another executive from an industry body said the impact of anti-China campaigns has started to show in offline retail.
To take advantage of the anti-China wave, Indian phone companies such as Micromax have decided to throw their hat in the ring. The company plans to launch three new budget smartphones with premium features soon.
These companies will also get a boost from the recently announced production linked incentive (PLI) scheme through which the government will choose five Indian and five global companies and help them expand mobile manufacturing in the country by providing them incentives of 4-6% over a period of five years from a corpus of ₹40,000 crore budgeted for the scheme.
"This is a great opportunity for Indian brands. And surely these schemes will help give them a boost, but it will take time," said Navkendar Singh, research director, Client Devices & IPDS, IDC India.
"It will take a few years before we see a comeback by Indian brands with a 100% made in India product portfolio. Of course, this needs to be supported by marketing investments and channel expansions, just like what China based brands have done in the past 4 to 5 years," added Singh.
Apart from Mitron, several short form video apps competing with TikTok have seen a spike in user base after the recent border clashes on the Ladakh border. A case in point is US-based Fireworks. On their mobile app, since May, it has seen a 25-30% increase in usage by content creators. Fireworks claims to have 186 million monthly active users in India.
Homegrown social media platform ShareChat, known for its multilingual content and users, too has seen an increase in its user base.
A recent report by app intelligence firm Sensor Tower, which sheds light on the app downloads status of Chinese apps from April to June on App Store and Play Store, shows that TikTok’s new downloads dropped from 23.5 million in April to 13.9 million by June 22. Similarly, PUBG Mobile’s new downloads shrinked from 9.9 million in April to 6.6 million in June. Bigo Live’s downloads dropped from 2.5 million to 1.8 million in June.
To mitigate the damage due to the backlash, many Chinese electronic brands are drawing public attention to the fact that most of their phones sold in India are manufactured here.
However, experts believe that the anti-China sentiment won't be enough for rivals to corner more market share in the long run.
Rushabh Doshi, research director, Canalys, believes this is a short term opportunity. In the long term, the availability of phones and price vs performance ratio that Chinese vendors are offering will be hard to match especially by local brands like Micromax, Karbonn and Lava.
“Samsung’s focus has also shifted away from volume game to getting enough margins and competitive products in the online space. Given that it is a short term opportunity, we are not sure how quickly Samsung can react to it," added Doshi.