The Festival of Chinese Lights ?

Rajeev Jayaswal & Vijay C Roy

Weeks ahead of Diwali, Simran Kapur (name changed) enters a prominent home decor showroom in Chandigarh to buy curtains, fancy lamps, mattresses, bed-sheets, doormats etc. Her brief to the salesman is simple; “Show me quality stuff, but please … no Chinese products”. Hearing this, the manager escorts her to the area that displays Indian brands. She selects products of a famous Mumbai-based company. Just before she swipes her credit card, the young manager hesitatingly informs her; “Pardon me mam; I think I must tell you this fact before you purchase these items. It is true that you have bought all Indian brands, but these companies have got them manufactured in China.” 

Moral of the story is that Chinese ‘hand’ is all-pervasive in manufacturing across the globe; be it American iPhones or French LV collections. Notwithstanding economic reasons for the Chinese omnipresence, there has been a growing clamour for boycotting Chinese goods, particularly during Indian festivals. Passions run high because of China’s overt support to Pakistan post-Uri attack and recent confrontations over Doklam. Many Indians have already stopped buying ‘Made in China’ products. But, most of them are unaware that Indian brands now resort to ‘Make in China’ for better margins. It’s all business; there is nothing illegal about it. Major international stores such as Walmart have been doing this for years; sourcing their own branded products from countries like China and India to save on the cost of production.

The situation is a little complicated this festive season mainly because of the Supreme Court’s ban on sale of fireworks in Delhi and surrounding areas ahead of Diwali. Anyway, children of the cyber world, by-and-large, shun anything that pollutes the environment. This will significantly reduce backdoor entry of Chinese crackers in the Indian market. However, smart businessmen from the neighbouring country often push their products in our market without the Chinese tag to avoid over attention on the social media that is usually followed by a boycott or call for it. 

Will crackdown on fireworks also affect sales of Chinese fancy lights? Dealers say a definite ‘No’. According to a Delhi-based wholesaler, “Customers want Indian stuff. We also want to sell Indian products. But, we have no alternative. Indian companies can’t match the Chinese quality, quantity and pricing. Both buyers and sellers know this fact.” 

Many major dealers in Lajpat Rai market in New Delhi say that they do keep some Indian products for sale along with the Chinese ones, but people often prefer Chinese ones because of their better finish. A Chandigarh-based trader echoes the same view. “Customers demand us to show both Indian and Chinese products, but most of them ultimately go for Chinese,” he said.

Besides quality and scale of production, Indian manufacturers also fail to match their Chinese counterparts in adaptability. “Because sales of products from China had dropped significantly last year due to boycott of its goods, Chinese traders have now slashed their rates by 25 per cent to 50 per cent on several items, including decorative lamps, dinner sets and idols of Indian gods and goddesses. They still manage their margins by adjusting quality and quantity. On the other hand, Indian products are 10 times costlier,” adds the trader from Chandigarh.

Dealers of decorative lights and fancy lamps agree that sales in this festive season have dropped by almost 25 per cent, but not due to the boycott of Chinese goods. “It is because people don’t have disposable income any more. Demonetisation and GST have badly affected our business. People can only buy fancy lights after meeting their essential requirements,” says a dealer. 

A joint survey by Assocham and Social Development Foundation (ASDF) estimates a steep decline in the sale of Chinese products this year. The study expects 40 to 45 per cent drop in the sale of Chinese lights, gift items, lamps and wall hangings and other items this Diwali. The study says that customers are more inclined to purchase local products such as earthen diyas than Chinese decorative lamps and fancy lights.

But the ground reality appears to be little different. “We have procured fancy earthen lamps and goddess idols from dealers based out of Kolkata to add variety. We were expecting brisk sales, but it turned out to be a big dampener. Sales of diyas and other articles are down by 60-70 per cent this year. People do come and ask for earthen lamps but only go for basic diyas, which is Rs 10 a dozen. They still prefer fancy Chinese lights,” says Kamlesh Bhatnagar, a Chandigarh-based dealer.

Consumers are also disappointed by the quality and finish of Indian products. Sangeeta, who has been shopping for idols, has not been able to find an appropriate Indian polyfibre Ganesha of her choice, so she had to settle for a Chinese one she says. “Simply banning or boycotting Chinese goods won’t help until and unless the Indian manufacturers offer variety and competitively priced products,” is the Chandigarh-based housewife’s advice to Indian manufacturers.

The (Un)Festive season

Besides fire crackers and decorative lights, Indian cosmetic industry,too, has great expectations from the festive season that starts from the Navratras and continues up to Bhai Dooj . This industry is also facing tough competition from its Chinese counterparts. “Most of the major cosmetic brands have started sourcing from China but sell under their own brand names. It is a fact that cost of production in China is quite low and quality of their packaging is excellent. If we are still surviving it is because of our quality and loyal customers. But our market is fast shrinking at such a rate that we may not survive by 2020,” says a Delhi-based cosmetic manufacturer. 

Chinese have captured the Indian market with their remarkable marketing strategies. They do not leave any opportunity, or any festival, to promote their products, he says. During this Rakhi, Chinese smartphone maker LeEco launched a campaign “Why brothers must gift this phone to their sisters on this occasion”. 

Dealers say that online shopping has further fuelled the domestic versus foreign brand confrontations. Many Indian consumers, who do not buy Chinese goods at a brick-and-mortar shop, are unmindful of Chinese influence while purchasing jewellery, luxury goods, items of home décor and apparel,etc. online. Their decision is influenced by the name of the brand, the price and the look of the product. Consumers seldom check the place of manufacturing. 

Online shopping is expected to grow with increasing number of cheaper smart-phones. According to a study by Criteo, an e-commerce marketing firm, online pre-Diwali sales have increase by 140 per cent, where shopping through mobile phones have played the major role.