India-China dispute: Vivo retires hurt from IPL; BCCI looks for replacement

The original contract with Vivo was from 2018 to 2022 for Rs 2,200 crore
Images of raging protests against Chinese goods appear to have pushed the country’s third-largest smartphone player, Vivo, to temporarily step back from its title sponsorship of the Indian Premier League (IPL).

 
On Tuesday, officials of the Board of Control for Cricket (BCCI) said that Vivo had decided to pull out of the IPL’s title sponsorship for a year.

 
Vivo declined comment on the matter but the cricketing body, officials said, was seeking a one-year replacement for the brand since it could make its way back next year.

 
This arrangement, they said, would be for three years, stretching from 2021 to 2023 on revised terms, and would depend on the geopolitical situation between the two nations.

 
The original contract with Vivo was from 2018 to 2022 for Rs 2,200 crore. The firm was paying Rs 440 crore annually, but had been in the eye of a storm since the deadly clash between Indian and Chinese soldiers in Ladakh.

 
It is unclear who will replace Vivo, since the T20 tournament is only a month-and-a-half away. It will be held in the United Arab Emirates from September 19.

 
Praveen Khandelwal, secretary general, Confederation of All India Traders (CAIT), who had criticised the BCCI’s decision to retain IPL sponsors on Monday, said that all other contracts with Chinese companies for the cricket league should be reviewed following Vivo’s exit.

 
Firms such as Paytm, Swiggy, Dream11 and Byju’s, which are associated with the IPL, have Chinese investments. Byju’s is also associated with IPL franchisees such as Kolkata Knight Riders.

 
“We have been running a ‘Boycott China’ campaign since June. The pressure on Chinese brands was growing. Vivo’s exit is a result of this,” Khandelwal said.

 
But persons in the know said that the entry of the Swadeshi Jagran Manch, an affiliate of the Rashtriya Swayamsevak Sangh, during protests on Monday drove Vivo to take the final call.

 
BCCI is said to be in continuous dialogue with Vivo for an amicable exit from the 2020 edition and has not floated a new tender yet for its replacement. It is expected to do so in the coming days.

 
Brands experts say that Vivo’s decision has come as a surprise. “I was shocked to hear about Vivo’s exit from the 2020 edition. But the protests were simply mounting. I see them back next year though, since they have not exited the India market,” said N Chandramouli, chief executive officer of brand insights firm TRA Research.

The share of Chinese brands in India’s smartphone market fell to 72 per cent in the April-June period versus 81 per cent in the first three months of the year, market researcher Counterpoint Research said last week, as most brands faced a supply crunch due to the lockdown. Imports by Chinese firms were also blocked at ports in June, hitting production and sales.

Experts say that it was important for Chinese firms to make their presence felt in the IPL, if they wish to gain share. A key reason for this being that the IPL this year will coincide with the festive season, an important period for handset brands. It also is the only high-impact sporting property from an India perspective this year.

 
That opportunity has clearly fizzled out for Vivo. Other handset brands such as Xiaomi, Oppo, OnePlus and Realme were busy preparing their media plans for the festive season, media agency executives said. They may now recast their strategy in line with current developments.

 
The Indian government has already banned 59 Chinese mobile applications after Chinese soldiers used stones, nail-studded sticks, iron rods and clubs to carry out a brutal attack on Indian soldiers after they protested the erection of a surveillance post by China on the Indian side of the Line of Actual Control in Galwan. Twenty Indian soldiers lost their lives in the clash, the biggest confrontation between the two militaries since 1967.

 


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