Case Study of How Indian Brands Under Twitter Attack After Indo-China Conflict

Indian based startup unicorns like Flipkart, Zomato, Swiggy and Paytm have recently been under the radar of Twitterati accused them of getting investments from Chinese investors. This anger has abruptly taken a rise after the deceitful act done by China at the Galwan Valley after 20 Indian soldiers were killed.

People have shown their anger on Twitter and have also suggested to start boycotting the services of these applications which are either china based or being funded by Chinese investors all over India. Many users have asked that these companies should get their stakes back as most of the stakes of these companies are in the hold of Chinese investors.

How Flipkart Responding To The Situation?
Snapdeal Statement
China’s Investment and Future Prediction

How Flipkart Responding To The Situation?

People on Twitter are asking people to boycott and it can be a harm to their current market situation. Although they have not come up with any formal response regarding this they posted a photo informing people that how they are trying to help sellers across India to work hard and how they will support them by providing their health insurance plans, by laying off the storage fees and trying to provide flexible work policies making them feel more comfortable and helping these sellers to ease their work.

China has created a large effect in the Indian market by investing frequently in the past 5 to 6 years. Many of the Indian homegrown startups have been backed up by Chinese investors. China has been a key investor in the technological development of the Indian market. With the recent situation where people are boycotting Chinese goods and the Government is banning Chinese Apps, things are turning worse.

“The overall sentiment is anti-China and that is building on various counts which have now been aggregated. A lot will depend on whether or not the government wants to play the hardball.The social media storm was inevitable. In the past also we have seen how some apps were downgraded citing 'national interest'. There could also be some direct business impact for the time being. However, how it will reflect in the long term will totally depend on the way the government plans to handle the current situation.” - Anonymous Industry Executive

Snapdeal Statement

While companies like Flipkart, Ola, Zomato, Swiggy and Oyo have not given any formal statement or uttered any word regarding this but Snapdeal came forward to give a statement.

“Snapdeal has always been focused on creating opportunities and access for India's small and medium businesses - sellers and manufacturers. For over a decade, we have championed the cause of Indian MSMEs and provided them with a platform to grow and succeed. As a proudly Indian company, we remain committed and steadfast in this mission.” - Snapdeal

China’s Investment and Future Prediction

A source named Gateway House has estimated around $4 billion of investments have been done by them in India's technology-based Startups in 2019 while a $2 billion investment was done in the year 2018. Moreover, at least 18 of the top 30 startups in India are being backed by Chinese investors.

Ant Financial, Tencent, Shunwei Capital, and Alibaba are some of the big Chinese investors who have their stakes in Indian based unicorns. Well, a startup founder has also stated that after the month of April the Chinese investments have started to come down due to which the doors have been opened for other avenues which are based in UK, USA, Middle East and India.

“Fresh investments will take time because everyone is cautious as to what will happen next. There is going to be a bit of a lull because the sentiment is certainly low. Both Wuhan and border tensions have come at the same time. There is an element of negativity. However, it will not have a major impact on the existing companies operating in India that have Chinese investors on board. The very fact that Chinese companies have invested in Indian firms, doesn't make them 'Chinese products'. There are so many Indian companies that have set up manufacturing units in China. If we keep on boycotting things like this, we will end up hurting our own economy and the talent growth” - Sreedhar Prasad, Independent E-commerce Analyst

Conclusion

Although it will be a hard road for India on the economic front for a while as there is a ban on the investments by the world's second-largest economy it will help in getting invested by other countries too which are more reliable and will help create a good relationship with them. Also, it will be helping all the Indian based startups and entrepreneurs and provide them with a great opportunity in the near future.

With the current tensions at the border, it looks impossible for a while to expect good relations with China and the spread of the deadly coronavirus will also play an important role in the Chinese market as many countries would give a second thought to having economic relations with them.

The USA is the world's largest economy, and is showing some disinterest in China for the past two to three months too can look forward to India and can become a prime investor in these firms.

FAQs

How many Chinese apps are banned in India?

224 Chinese are banned in India since 2020

Is PUBG banned in India?

PUBG is banned in India under the instruction of the Government of India.

Why Chinese apps are banned in India?

Chinese apps are banned in India because of the security and thereat of Indian citizens and the ongoing conflict between the two countries.