Most of Li Yangs team in India followed him for many years, and they also received relatively good salaries in the local area. This is the background that can guarantee the current business to maintain relatively normal. More or less, we all have friendship, but we are afraid that (negative) emotions outside will easily lead to follow suit.
Li Yang runs an e-commerce platform with hardware as the main commodity in India. The past two months have been like a long roller coaster for him. After India conditionally lifted the restrictions on online platforms, the platform ushered in a brief burst of consumption of mobile phones and parts products. However, unexpectedly, a border dispute between China and India suddenly emerged, and the Indian government announced that 59 Chinese apps were banned, which once again caused him to fall into the dilemma of users panic.
Novel coronavirus pneumonia mobile phone industry chain is facing the following 33% challenges: the continuous recovery rate of VS mobile phones and the demand for replacement, the multiple attacks of the national mood + the new crown pneumonia epidemic situation, and the sharp changes of customs environment such as customs clearance, and so on. Next, I am afraid that the storm of the shortage of spare parts will be possible in India.
Standing at the crossroads opened in the second half of the year, the uncertainty has further increased. What is the future of Chinas mobile phone industry chain in India?
It should be said that we are in a period of extreme turbulence. Zhang Xin lamented that although the Indian authorities did not recognize it, the problem of customs clearance has actually existed for about a month.
Zhang Xin is the head of a Chinese Investment precision structural parts manufacturers factory in India. Most of the Chinese invested factories in India that he recently contacted are facing such difficulties.
At present, a large number of goods of Chinese enterprises are stranded in Indian ports. Even if the components ordered by Chinese manufacturers from Japan or other countries are directly imported into India, they are still stuck. Zhang told 21Tech that novel coronavirus pneumonia is a common problem in India. But in fact, our industry exchange found that basically only goods related to Chinese companies will encounter the problem of being stuck, and no one can get customs clearance smoothly.
This phenomenon has since been more confirmed.
In early July, it was revealed that additional Indian censorship of Chinese imports disrupted Apple supplier Foxconns operations in southern India. However, on the 3rd, Foxconns parent company, Hon Hai group, issued an announcement at the Taipei stock exchange in response to the announcement that for the import and export process of goods in India, they have applied to the local customs in accordance with the regulations. At present, the cargo logistics clearance procedures have been solved and will not be affected..
(photo: Clarification Announcement of Hon Hai Group)
Novel coronavirus pneumonia is a new challenge for the manufacturers of mobile phone industry chains. With the outbreak of new crown pneumonia cases in India in March this year, Prime Minister modi has extended the sealing up measures many times. Even if the major mobile phone industry chain factories have been allowed to resume work at a rate of 1 / 3, it is still a drop in the bucket in terms of Indias huge market capacity.
From the perspective of policy trends, India will not be quickly unsealed in the short term, so for enterprises, working from home is certainly less than half of the efficiency of working state. According to Zhang Xins analysis of 21tech, since this year, many changes in the Indian market have brought more and more pressure to Chinese enterprises in India.
Although the app of Li Yangs company was not listed in the blocked list, the sudden move of local officials still affected them. A panic atmosphere from local users quickly spread.
Recently, our users are worried that the change in their accounts will be blocked, and they have chosen to withdraw cash. Some users have started to buy a large number of goods. At present, the logistics in India is still not smooth. In fact, the impact is chain and bad. He told 21tech reluctantly that at this stage, Indias new retail platform can be basically defined as being in a downturn.
Under the influence of many uncertainties, Chinese enterprises in India can only wait cautiously for the next step.
2. A market in short supply
In recent years, the Indian market and Chinas mobile phone industry chain have maintained a close relationship.
In particular, under the made in India strategy vigorously promoted by local authorities, a large number of key industry chain manufacturers and complete machine manufacturers have successively opened factories in India. In recent years, due to the continuous adjustment of local tariff policies and other policies, and the local huge consumer demand is gradually accepted by Chinese manufacturers, the pace of Chinese enterprises investment in India has further expanded.
(Figure: survey of Indian smart machine market in Q1 2020 by IDC)
At present, we have seen some leaders of large-scale groups in India come forward and say that they cant be blinded by emotions, otherwise it will inevitably bring a great blow to the local economy of India. Therefore, we believe that some local representatives of different interests will not tolerate the continuation of this sentiment. Jia Mo pointed out to 21tech.
From the perspective of smart phones, if Chinese brands are excluded, there is no second large-scale brand outside Samsung. Apple ranks seventh in Indias smartphone market, with only 1.6% market share in Q1 this year, and only about 1% of local brands represented by lava. Then maybe only Samsung can choose. However, Jia Mo pointed out that at present, the production capacity of all mobile phone manufacturers can only be restored to 1 / 3 of the original, which means that the local market continues to be in short supply. This 30% capacity is seriously below demand.
Jia Mo further analyzed to 21tech that although India had begun to be affected by the epidemic in the first quarter, under the background of global performance decline, Indian market shipment volume still increased year on year, indicating that the demand of local market still exists.
Although considering that India may face the background of rising unemployment and declining economic activity under the epidemic situation, the price of Indias best-selling mobile phones is between us $100 and US $150, which is not very expensive and is not too heavy a burden on users. There has been a strong demand for replacement of low-end machines in the local market. Jia Mo believes that, no matter how the demand is reduced, it will not be reduced to the current production end which can only be 30% of the original state. The shortage of supply will almost be the result of the persistence of the epidemic.
It should be said that the above market phenomenon is not the product of the so-called retaliatory or recovery consumer demand. Jia Mo stressed to 21tech that the epidemic situation in India is far from being controlled except Bangalore and other developed areas. Therefore, judging from the overall situation, Indias shipment data this year is bound to decline to a large extent compared with the same period last year, but the current data is still difficult to support the study and judgment of the trend of q3-q4 period.
According to canalys statistics, in the first quarter of 2020, the proportion of intelligent machine shipment in Indian market under $200 will reach 77%, that of medium end machines with $200-600 will account for 21%, and that of high-end machines will only account for about 2%. Therefore, the market pressure below $200 will be greater. Most of these users may belong to unstable labor force. Once they lose their jobs, their demand will be affected. At present, of course, its hard to say. Jia Mo analyzed.
(Li Yang and Zhang Xin are pseudonyms)
Source: responsible editor of 21st century economic report: Wang Fengzhi_ NT2541