China’s retaliation on South Korean companies regarding THAAD (Terminal High Altitude Area Defense) situation is also making Chinese companies that have entered South Korean markets nervous. Not only are they refraining themselves from marketing and advertisements but some are having actual reduced sales volume.
According to industries on the 30th, Chinese home appliance manufacturer called Haier recently reduced amount of advertisements and marketing activities that are carried out in South Korea as they are suffering from reduction in online and offline sales volumes as Chinese Government is carrying out indiscriminate retaliation on South Korean companies regarding THAAD situation. Although Haier had maintained steady growth after entering South Korean markets, its atmosphere has changed after Chinese Government’s retaliation on South Korean companies. Haier has partially changed its strategies such as actively pushing for ‘Aqua’ brand that shows less of Chinese color rather than ‘Haier’ brand.
Xiaomi is also paying careful attention to anti-Chinese sentiment. Although current situation has not led to reduction in sales volume, it is paying careful attention to changes in its sales volume since it does not know how situations in China will unfold. Xiami has been carrying out marketing activities for its products at major stores by saying its products’ prices are good compared to their performance. However it has become difficult for distributors to emphasize ‘Xiaomi’ brand on their own.
Another Chinese PC company is not mentioning anything related to THAAD at all in order to prepare for any sudden variables. This company, which is a multinational brand, is selling a lot of its products based on internet shopping malls. After discussing internally, it has decided to carry out marketing activities that do not show that it is a Chinese company as much as it can.
“Although there are not any structural anti-Chinese sentiments like the ones in China, there are many offensive comments on internet.” said a representative for South Korean branch of a Chinese company. “Executives from Chinese companies gathered at an embassy at the end of last year and discussed about preparing solutions such as refraining from advertisements and marketing activities.”
Intensity of retaliation from Chinese Government on South Korean companies in China is getting stronger as 99 Lotte Marts recently received suspension of business. Anti-Chinese sentiments including boycotts of South Korean products such as blocking of South Korean movies from being screened at Beijing International Film Festival are becoming worse by each day. . Actually public trade difficulty report center, which was established by Korea International Trade Association on the 8th of this month, received 104 reports from 89 companies by the 29th. Compared to the number of companies that were introduced on the 17th, the number of companies rose by about 30.
Experts explain that if retaliation is prolonged, this will incite anti-Chinese sentiments and lead to Chinese Government regretting about making retaliation such as boycotts of Chinese products by South Korea.
“Because we have learned that economies are affected by politics, South Korean companies will start to avoid China.” said Chief Researcher Cho Lee-hyeon of Korea Small Business Institute. “Rather than reacting emotionally like Chinese Government, we need to make rational decisions.
Staff Reporter Jung, Youngil | jung01@etnews.com & Staff Reporter Lee, Youngho | youngtiger@etnews.com