'Are the Chinese really coming?'
Hoklo Taiwanese
Are the Chinese really coming?
NEERAJ SAXENA & SUDIPTO DEY
TIMES NEWS NETWORK [ MONDAY, NOVEMBER 18, 2002 11:02:12 AM ]
NEW DELHI: When the 22nd edition of the India International Trade Fair
started last Thursday, there was a lot of interest what with 150 Chinese
companies reported to be participating for the first time.
But three days into the trade show, and it is clear that there are chinks in
the Chinese armour. If one thought China could flood the Indian markets with
cheap goods and the IITF could be a stepping stone, the country's
participation at the show leaves much to be desired.
Clearly, there are lessons to be learnt. There are 150 odd Chinese firms
(the list includes some non-descript shopping establishments and small-time
traders too) which are taking part at IITF for the first time. Most of these
are at a complete loss, seemingly having landed in an alien land with
little ground support.
Their lack of knowledge of the English language has made the matters worse.
The representatives of these Chinese firms are all at sea to explain to a
bewildered Indian public that the goodies they have are not for sale.
Instead, their eyes eagerly sift for businessmen among the crowd so that
local tie-ups can be sewed for later day trading.
Hall 18 in one corner of Pragati Maidan is where the Chinese participation
is concentrated. And it is drawing a lot of media attention, and curious
crowds, who are landing up looking for cheap bargains, spurred as they are
by cheap 'China Bazaars' in some cities.
But the enthusiasm turns fast into disappointment with most stalls
prominently displaying signs saying `Not for sale'.
There are stalls displaying two wheelers, art and artefacts, bone china and
ceramics, consumer electronics and home appliances, footwear, toys, silk and
textile, batteries, sewing machines, bulbs and lamps, besides communication
products, electric motors, machines tools and light industrial products.
But since most of them have come to India for the first time, they have
little or no representation. They are essentially here to look for
importers, who can appoint sub-distributors and offer the after sales
service, if any!
An interesting example is Chinese automobiles about which much has been
written about. For the visitors, they are fancy and feature-rich, and fabled
to be cheap. Quite naturally, the maximum interest is directed towards the
stalls where half-a-dozen Chinese two-wheeler companies are located.
They walk up to the stalls, eyeing the attractive bikes on display, and
enquire about the price tag and availability, but are disappointed upon
learning that there are no plans for these mean machines to be launched in
India in the near future.
From Luoyang Northern Ek Chor to Chongqing Zongshen and Jianshe to Loncin,
all Chinese bike companies present at IITF are looking for tie-ups. As per
unconfirmed reports, Luoyang has been talking to Haryana-based Dayan
Nagakawa and Loncin with both Kinetic and Hero for tie-ups, but the
negotiations have so far come a cropper.
We are looking to appoint distributors in India who can represent us. Our
bikes can be very competitive in India, but we are not looking at starting
our direct marketing presence here, said a spokesperson of Luoyang Northern
Ek Chor Motorcycle Dayang brand of two-wheelers.
The only exception to these companies is Chongqing Lifan, among the top bike
companies in China, which has a tie-up with Monto Motors of India under
which the latter has already launched one 100 cc Lifan motorcycle and plans
to launch two more.
In addition, Monto is also planning to launch Lifan's consumer electronics
range at attractive price points in a year's time. But even Lifan has met
with rather limited success in India so far.
But this is not to say that there is nothing that Chinese companies cannot
surprise the visitors with. For among those who are selling some of their
wares, there can be a surprise or two tucked somewhere.
Like the washing machines from Guangdong Wanjiada Home Appliances: a dustbin
like washing machine with a mixer-grinder like heart inside that can solve
the problem of washing your infants nappies and frocks. The price: Rs 1,600.
Similarly a 7.5 kg twin-tub semi-automatic machine can be yours for as
little as Rs 6,500. There is no service back-up though.
The company has already found a Delhi-based trading partner who told
economictimes.com that he had priced the same machine at Rs 2,500 on day
one, but looking at massive crowds that thronged the stall, he hiked the
price to Rs 6,500, partially also to cope up with the rush.
Ditto for the framed replicas of ancient Chinese paintings which Delhi's
Shivraj Enterprises (its Indian distributor) is sourcing from Hong Kong
based Dominic's Art Gallery. The prices for a 20x24 painting went up
overnight from Rs 2,000-3,000 to Rs 11,000!
That's the kind of margin we have in these items from China, gleams
Shivraj's representative Vivek Gupta. It is setting up an exclusive showroom
on Mehrauli-Gurgaon road.
Then there is a stall that has decided to retail Chinese ceramic vases,
entirely on its own so that it needn't take back the huge repertoire of
inventory it brought along. Its two non-English speaking representatives are
having a tough job at hand to sell on one hand, hoo away kids and pinchers
and all the while look for a trading partner.
In absence of any advise and unknown to local purchasing power, their prices
are ad hoc and border on bargain to outrageous on different items. But the
two Chinese are not prepared, and have little time for, discussing their
problem with the media. Language barrier is pretty much their bane.
And that is the story with most of the Chinese firms present at IITF: they
wear bored looks, and the only time their eyes lit up is when an occasional
visitor from among the pushing and jostling crowd thrusts a business card
in their hand and utters: Can we talk business?
The conclusion: Sure, China cannot be under-estimated by any stretch of
imagination. It is also true that the China most Indians associated with
cheap batteries, bone china crockery, Tiger balm and the like, has moved
several notches on the manufacturing ladder.
Today, there will be very few consumer electronic, electronics and computer
companies that will not have a large manufacturing unit in the country. That
apart, the Chinese have proven they are world leaders in manufacturing all
type of goods and are second to none in sheer economies of scale as well as
quality, thus giving rise to the fears that Chinese goods with very low cost
of manufacturing can flood the world markets.
The threat is very real in India where cheaper Chinese goods imported by the
Indian traders are already causing sleepless nights to several small and
medium scale industrial units, be it toys or lighting.
But having said that, and going by the lacklustre IITF show, it is obvious
that it will be a while before the fabled Chinese dragon can look towards
India and the Chinese companies can scale the Great Wall to turn their
attention towards Indian markets in a serious manner.
