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Oppo, Vivo Recalling Chinese Employees Back From India; 3 Possible Reasons

Chinese expats have been removed from front-office assignments as well.

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According to an unconfirmed report, it has been found that Oppo and Vivo, two major Chinese smartphone manufacturing companies, have sent hundreds of Chinese employees back home to China from India.

The report by Economic Times claims that around 400 Chinese expats working with Vivo and Oppo have been asked to leave India, and reach their motherland, due to various issues.

Even Vivek Zhang, Vivo’s Chief Marketing Officer who negotiated and pulled off their partnership deal with IPL, has gone back to China.

Why this is happening? Is it good for the technology sector in India and China?

Here are three possible reasons, as mentioned in the report:

Recalling Chinese Employees: Military Standoff and Advisory

Due to the ongoing military standoff between Indian and Chinese armies at Doklam near the India-China-Bhutan tri-junction, Chinese Govt. has issued travel advisory for all Chinese residing in India.

This is a much stronger advisory, compared to the last one issued on July 8th. Chinese Embassy said: “There frequently occurred natural disasters, traffic accidents and infectious diseases in India.”, adding, “The embassy reminds all Chinese citizens in India to be wary of the situations above in order to secure themselves a safe journey abroad,”

This can be one of the reasons why so many Chinese expats have been asked to leave India.

As per reports, Chinese expats have been removed from front-office assignments as well. And, this leads to the second reason.

Low Sales

The report has claimed that among all Chinese brands operational in India, Vivo and Oppo have somehow attracted negative impression of being Chinese brands, and this has resulted in massive loss in sales.

As per the report, sales of Vivo and Oppo brands have diminished by 30% in July and August, and this can be one reason why Chinese expats are being sent back home.

Head of a leading retail chain said, “Among the scores of brands that have their origin in China – Xiaomi, Lenovo, Motorola and OnePlus – largely Oppo and Vivo have the consumer perception of being Chinese. So, the anti-Chinese sentiments have had the maximum impact on them in several states, where even their outdoor hoardings are pulled down. Even the entry of Xiaomi in offline retail has hit these two brands.”

More and more Indians are being deployed in various positions in the distribution channel, to portray a more positive image, something which brands like Lenovo, Motorola, Xiaomi and OnePlus have done in an excellent manner.

Oppo has denied any such report of low sales, as their statement said: “This year (2017) has been a great year so far for Oppo India and we are growing phenomenally year-on-year. The company will continue to provide the best camera phone, especially selfie-focused smartphone to the Indian youth,”

Xiaomi

Interestingly, the entry of Xiaomi in offline retail has also been attributed as one of the reasons why Chinese expats are being sent home by Vivo and Oppo. With Xiaomi’s entry, the offline retail market has drastically changed, and Oppo and Vivo now wants change their go-to-market strategy.

For instance, Chinese are being removed from decision making positions, and more Indians are being positioned in front of last leg retailers for instilling more confidence and to to remove negative perception.

One unnamed executive said, “The decision-making authority always remained with the expats, even in the districts where there were mostly junior-level staff. However, after the exit of so many Chinese employees, some autonomy has been given to Indian executives at the distributor level, with a mandate to revive sales.”

Analysts are believing that the exodus of Chinese expats is temporary, and once situation improves, they will get back to India.

We will keep you updated as we receive more information.

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