Podcast 13th November 2015
Alibaba, the Chinese ecommerce giant, achieved record sales of USD 14.3 billion on one day. The Singles day sale on the 11th of November 2015 drew in very strong response from consumers in China and other countries.
The Singles day sales of Alibaba is higher than one year revenues of all Indian ecommerce firms put together. A large part of the sales were of foreign goods indicating the demand from Chinese consumers for quality products.
It would be interesting to note if there was demand for Indian products in the Singles day sale. This brings us to the question of whether Indian Brands have a China strategy or not.
China is a huge consumer market and dwarfs India on all fronts. Apple the worlds most profitable and most valuable company saw China contribute to almost 25% of its last quarter’s revenue of USD 51 billion. JLR the iconic brand owned by Tata Motors sells close to 20% of its vehicles in China. Similarly China contributes to a large percentage of sales of many other global brands.
Global brands cannot afford not to have a China strategy. Indian brands too will have to have a China strategy if they want to compete and grow in a global marketplace. Chinese consumers can make or break brands given their spending power and it is extremely important to catch the eye of the Chinese consumer.
India is seen as a domestic consumption driven economy while China is seen as an export driven economy. However the size of the domestic marketplace is much higher in China than in India as seen by the one day sales of Alibaba.
Indian brands wanting to grow and grow fast must look at ways to cater to the Chinese market. Like in India, Chinese consumers have their preferences and if those preferences can be met, then Indian brands can get on to the global center stage or else they will stay small in the global market even if they believe they are big in India.
As of now, apart from JLR, there does not seem to be any Indian brand making inroads into the Chinese market. If this does not change, Indian brands could seriously become uncompetitive globally.
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