SMARTPHONES: Oppo Lands in India Protest Storm

Bottom line: A mass protest against Oppo in India over a Chinese manager’s desecration of the national flag won’t impact the company beyond a week or two, and reflects cultural sensitivity issues Chinese firms will face as they expand abroad.

Oppo under fire in India

Smartphone high-flyer Oppo is quickly learning the road to India isn’t always so smooth, with word of a mass protest at the company’s local operation due to a controversy involving desecration of the Indian flag. In this case the company appears to be learning a fast lesson in cultural sensitivity, which underscores one of the more subtle lessons that Chinese firms will need to learn as they expand abroad.

I doubt this particular incident will have any long-lasting impact on Oppo, though it will be interesting to see if it might affect its recent major cricket sponsorship deal in India. (previous post) The incident could also make Oppo think twice about its other big plans for the market, namely the building of a major production base there. 

We’ll return to the bigger picture shortly, but first let’s look at the latest protests that apparently had their roots in an incident that happened at Oppo’s office in the Indian capital. The reports are a bit unclear, but the one thing that does seem certain is that a Chinese manager at the facility ended up throwing an Indian flag into the trash can as the result of something that happened at the office. (Chinese article)

Oppo appears to be saying the manager threw the flag into the trash because it was on a seat that he was trying to clear to make space for a local employee. Perhaps that was the case, though that’s only Oppo’s explanation. Whatever the reason, the action didn’t sit well with the employee and possibly others nearby, who saw the action as highly disrespectful.

As a result, hundreds of employees began to demonstrate against the company outside its New Delhi offices. A photo of the demonstration certainly looks like the number was at least several hundred people, many waving Indian flags in protest. Oppo’s statement detailing the incident says the Chinese manager at the heart of the incident has been disciplined, but doesn’t say much else.

I expect the incident has probably died down by now, but images and reports of the protests certainly won’t help Oppo’s sales at the moment. This particular incident looks somewhat like protests that broke out against Chinese companies in Vietnam a few years ago. But that particular incident had a strongly political angle and was fanned by Hanoi over a territorial dispute between China and Vietnam.

By comparison, this time the root of the incident seems to be purely due to Oppo’s own behavior and lack of cultural sensitivity. I do have to applaud the company for trying to be transparent about what happened, and also for disciplining this culturally insensitive manager. Whatever the case, the manager clearly should have shown more respect towards the Indian flag in his handling of the situation.

Cultural Sensitivity Gap

China is by no means the only country where managers may require a little more cultural sensitivity training. Managers from major western firms probably learned similar lessons back in the 1970s and ’80s, when many companies first started expanding abroad and discovered the need to respect local cultures and customs. The difference here is that most Chinese companies have really only started going out in the last decade, and are still learning this kind of lesson.

Before all this happened, Oppo was one of China’s fastest-rising smartphone brands, taking the title for top seller in its home market and also rapidly rising in India. In last year’s fourth quarter, the company was the fourth biggest brand in India and climbing fast. It’s committed at least $360 million to the market in the last few months alone, including $160 million to sponsor the country’s national cricket team a few weeks ago (previous post) and another $200 million to build an Indian production base.

All of that brings us back to the question of what impact, if any, will this incident have on any of Oppo’s development plans in India. I suspect there may be one or two calls for the cricket team to scrap the recent sponsorship deal that will be quietly ignored, and that Oppo’s sales may suffer for a week or two until all this blows over.

But the incident should have relatively little impact past a week or two, at which point things will probably return to normal as both the company and local officials try to put the matter behind them. Oppo should also be lauded for handling the matter in a far more transparent and professional way than we probably would have seen from Chinese companies going abroad several years ago.

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