Of late, there’s been a discussion in Indian media on the importance of a brand’s country-of-origin in purchase decisions. It has been triggered by the decision by the Indian government to ban a bunch of apps of Chinese origin – TikTok being the most popular of them. Also recent geopolitical developments, tensions between the governments and the media visibility have created a mood of resentment among a lot of Indians about China and as an extension, brands from China.
Social media trends have called for a boycott of ‘Made in China’ brands. Even beyond social media, one has experienced a willingness among people to avoid ‘Made in China’ brands at least in some categories. Brands seemed to have accepted this sentiment as a reality – some have highlighted their source country and the implications (e.g. Nokia and design) or simply country of manufacture. News reports have highlighted the gains made by Samsung in the overall mobile handset market in India, where Xiaomi is still the leader in smartphones. In this context here are a few thoughts on the issue:
Country of origin: plays a role in some categories
In my view, country of origin is a consideration or a factor which can impact perceptions either way in some categories. They could be any of these:
- categories where precision engineering or complex manufacturing is involved: e.g. automobiles. German engineering is considered worth paying a premium for by car buyers. Japan too has earned a positive reputation in this category
- luxury or exquisite craft comes into play: when it comes to high fashion and super-premium cues (e.g in fragrances) Italy and France enjoy an advantage. So much so that premium real estate properties in India prefer naming their projects with cues of these two countries
- perceptions of taste or quality associated with a region: Swiss chocolates and wine from California or Australia have positive cues
Other countries may enjoy a positive edge in perception in niche categories: India & Sri Lanka in tea, spices for example. Also these are driven by perceptions created over time across popular culture, media and word of mouth. Stereotypes are prevalent too about a country’s imagery which can impact brand perceptions too.
Which country’s brand is it anyway?
A few brands have gone on to become part of the collective memory of a generation in India thanks mostly to them being around for many years and being visible through a physical presence. In India, Bata is pretty much considered to be a local brand. However, The Bata Shoe Organization, its parent company, is a Czech multinational footwear and fashion accessory manufacturer and retailer.
Also, in a globally interconnected world, the context of ‘where the brand is from’ and hence associating it with that country is tricky. Micromax was an Indian brand in mobile handsets but the manufacturing was in China. Several automobile brands from Japan are manufactured in India.
Country of origin and purchase decisions
Our brand choices are led by the emotional brain. We only think we are taking rational decisions, mostly to justify the decision already taken.
In mobile phone brands for example we could justify the technical specifications and ‘bang for the buck’ considerations for brand choice but there’s an intangible pushing a potential customer towards a brand. It could be pro-Android or iOS for example. Given that there’s hardly any gap in terms of tech specs within a price range, I feel emotional brain will play an even greater role. Budget considerations and price-value equation will come into play but what makes one choose an Oppo over a Vivo, OnePlus, Samsung or Motorola in a price range? It is most likely be a softer issue driven by the emotional brain, if the quality and brand perceptions are on parity too.
Specifically with regard to Chinese brands, I think many had already made up their minds well-before this debate to look for options in the low value, every day items. In Bangalore, neighbourhood supermarkets are filled with Made in China diyas (lamps), toys and more. It will be a lot more difficult to replace China-made products in other categories such as industrial items and spare parts for manufacturing processes.
In the long run, I think it will be unlikely that consumers will switch back to Made in China products in the low-value products. In other categories such as ‘perfectly acceptable replacement’ options are available it may trigger a switch. Here too brands such as Xiaomi and OnePlus have a huge fan following driven largely by affinity towards the product itself and the overall price-value will not be easy push-overs.