A few days ago, after a regular conference call with the Indian team via WhatsApp, an Indian subordinate approached him alone. Hes been with me for three years, but hes been very upset lately. Li told 21tech that the employee complained that friends around him had been accusing him of working for a Chinese company. Although he said that he himself is nothing, but I feel that my Indian team has not been so enthusiastic recently. I think this is a common phenomenon in India.
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.
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 fact, this reveals a chain dilemma, that is, short-term supply shortage may affect the next link of the industrial chain. If the customs clearance problems of Chinese enterprises are not solved continuously, the parts in the industrial chain may face the crisis of shortage. Although the factory has begun to operate normally according to local requirements, Zhang Xin is worried.
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
This has brought huge employment opportunities to the local market. A number of Chinese mobile phone industry chain manufacturers contacted by 21tech pointed out that local teams were set up, a few managers were Chinese, and other large production line personnel and customized R & D personnel were from India.
As a result, the mature industrial closed-loop has become the background of the rapid rise of Chinese mobile phone industry in India. Jia Mo, an analyst at canalys, told 21tech that in the first quarter of 2020, Chinese manufacturers, including Xiaomi, vivo, oppo, realme, Yijia, Chuanyin, Motorola, Huawei, Coolpad, TCL and even Jinli, had already accounted for 78% of the total share in India in the first quarter of 2020.
(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.
Even under the influence of current uncertainties, if measured in an extreme state, the 78% share from Chinese manufacturers can not be swallowed by Samsung and apple, or by Indian local brands micromax and lava.
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.
If the Indian government faces up to the current situation, the next step may be to meet the needs of the market and conditionally relax the lock in policy for Chinese enterprises. However, in order to cater to the so-called nationalist sentiment, it may further aggravate the market turbulence.
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.
Source: responsible editor of 21st century economic report: Wang Fengzhi_ NT2541