The ‘Boycott China’ movement in India has led to a soft ban of Chinese mobile application with TikTok and UC Browser and a handful of applications feeling the heat of the political issues between the two nations. But, what if the ban extends beyond just application usage? Imagine a ban on trade! If that happens, how will it impact the economies? How will it affect the sports sector in India?
The thought of India ‘Boycotting China’ when it comes to the sports sector is a scary one. China is a big player in the world of manufacturing and infra development. Currently, China is a global leader in manufacturing with China commanding 28% of total global manufacturing with the USA at 16% and India with 3% of total manufacturing output in 2018-19.
In terms of how it affects sports business in India let’s dissect the possibilities from two perspectives:
- Effect of the ban on sportswear and equipment (Direct)
- Effect of the ban on other sports business (Indirect)
Effect of the ban on the sportswear and equipment
Importing – It is believed that more than half of the sports industry goods like badminton rackets, shuttlecocks, gym equipment, table tennis balls, and other sportswear are being from China.
The government of India is mandating the disclosure of ‘country of origin’ which could lead to a potential issue with products coming in from China. It is believed that Puma, Adidas, and Nike — imports from China account for 10-30% of the products they sell in India. This is a significant volume and the solution is to manufacture or assemble in India at a high cost to be borne by customers.
Effect of the ban on other sports business
Endorsement deals by Indian athletes with Chinese brands – Olympics silver medallist and World Champion PV Sindhu has signed a four-year deal worth INR 50 crore with Chinese badminton racket company Li-Ning. Kidambi Srikanth has an INR 35 crore deal with the same company. Li-Ning is also currently Indian contingent’s official apparel partner and the Indian Cricket team captain has an endorsement deal with a Chinese mobile manufacturer.
Besides Badminton, Cricket in India will be affected by the ban too. There is a huge Chinese investment in Indian Cricket (Sponsorships) both directly and indirectly at BCCI and IPL level.
Let’s look at the brands that sponsor BCCI, BYJUS, an online education application is currently the main sponsor of the Indian Cricket team. Tencent has a minority stake in Byju’s which is valued at INR 1000 Crores. Tencent also has a majority stake in Dream 11, India’s biggest fantasy gaming platform and it is team India’s official partner.
Team India’s title sponsor is Paytm. Paytm is an online payment application and Alibaba has a 37% stake in the company and its deal size with BCCI is around INR 326 crores for five years.
Indian Premier League (IPL) is the biggest Twenty20 cricket league in the world and that too has Chinese sponsorship connection with the title sponsor VIVO (a mobile phone manufacturer) paying INR 2200 crores for five years.
Tencent and Alibaba investments are also rampant in other sponsors of the IPL with Dream 11, Byju’s, Paytm, and Swiggy who are associated with IPL as Official partners and associate partners.
China’s presence in the Indian sports sector is very prominent with manufacturing and monetary investments in companies that sponsor athletes and sports associations in India. It may be easier for the government to clamp down on manufacturing which can be a boon for the Indian sports equipment sector in India, however, big brands like Puma, Nike, etc. may have to shift manufacturing/assembling in India which may affect the consumers in India with increased prices due to the expensive cost of manufacturing in India.
As far as the Chinese presence in Indian tech companies that sponsor the Indian Cricket ecosystem is concerned, there is a lot more to it than sponsorship. I reckon there are a lot more complications that can affect the trade and economics and can have a domino effect on the tech industry and eventually on the Cricket ecosystem in India.
In my opinion, Politics and sports should never mix because the complications have a deep impact on the sport, athletes, fans, and the industries that thrive around the brands.