The last thing e-tailer Snapdeal expected when brand ambassador Aamir Khan spoke recently about growing intolerance was to deal with a consumer backlash. But, that is a reality the e-commerce major, whose estimated enterprise valuation is $7 billion, is facing.
Almost 91,000 customers have in the past two days downgraded the Snapdeal application to one on a scale of five and the Twitterati is abuzz that another 700,000 consumers have uninstalled the app from their mobile phones.
While Snapdeal distanced itself from the remark, saying the comments made by the actor were "in his personal capacity", the episode has sparked a debate, with chief executives of companies admitting they will now be cautious when drafting celebrities who are passionate about issues.
"This is the first time India has seen something like this, and I suspect companies will now ensure there is some safeguard in place when hiring celebrities who are vocal about issues," says S N Rai, co-founder and director, Lava International, maker of the Lava and Xolo brands of mobile handsets.
Lava recently brought on board actor Irrfan Khan to endorse its Xolo phones. Rai says the company saw a fit between Irrfan Khan's personality and the values the brand wished to communicate. "That is how most brand endorsements happen but that could change. Companies will become stricter," he says.Almost 91,000 customers have in the past two days downgraded the Snapdeal application to one on a scale of five and the Twitterati is abuzz that another 700,000 consumers have uninstalled the app from their mobile phones.
While Snapdeal distanced itself from the remark, saying the comments made by the actor were "in his personal capacity", the episode has sparked a debate, with chief executives of companies admitting they will now be cautious when drafting celebrities who are passionate about issues.
"This is the first time India has seen something like this, and I suspect companies will now ensure there is some safeguard in place when hiring celebrities who are vocal about issues," says S N Rai, co-founder and director, Lava International, maker of the Lava and Xolo brands of mobile handsets.
Flipkart's co-founder and CEO Sachin Bansal came out strongly in support of Snapdeal on Wednesday, saying slamming it for Aamir Khan's views was wrong. "Brands don't buy into brand ambassadors' personal opinions. @Snapdeal shouldn't face this," Bansal tweeted on Wednesday.
Rai or Bansal are not the only ones speaking this language. C M Singh, chief operating officer, Videocon Industries, says companies will watch the unfolding developments closely. "I expect most advertisers to watch this situation closely because there are implications when a celebrity says something. At the end of the day, he represents a brand. A positive activity or comment has a positive rub-off on the brand he endorses. Similarly, something is construed negatively will also the rub the brand the wrong way," Singh says.
Videocon has worked with a slew of celebrities, including Shah Rukh Khan, who continues to be associated with it. Others who have endorsed the brand in the past are cricketer Mahendra Singh Dhoni and actor Abhishek Bachchan.
Aamir Khan has endorsed Titan, Tata Sky, Godrej and Coca-Cola in the past. These companies were not available for comments. In a statement, Coca-Cola India, said, "We have had no commercial association with Aamir Khan for several years and it is therefore, out of bounds for us to comment on his remarks."
But Harsh Mariwala, chairman, Marico, the maker of brands like Saffola and Parachute, says the incident will peter out in a few days. "I don't see anything wrong with what he has said and I don't think it will have any impact on how brands deal with celebrities. This was a personal opinion of Aamir's, something he voiced when attending an event. I don't think it was intentional. Yes, if there is an attempt to gain political mileage out of it, then it may not die down in a few days," Mariwala says.
Aamir Khan featured as the most trusted film celebrity after Amitabh Bachchan in the 2015 edition of the annual Brand Trust Report, which is published by city-based brand advisory firm TRA. According to N Chandramouli, chief executive officer, TRA, Aamir had moved up two notches in the 2015 list from 2014. Aamir last year was ranked fourth after Amitabh Bachchan, Shah Rukh Khan and Salman Khan.
Internationally, say experts, brand endorsement agreements are watertight with probably every eventuality factored in. "It is almost like a pre-nuptial agreement, where everything is laid out in black and white," Chandramouli says.
"India could see something similar and possibly the discussion between brand and endorser will have to grow as to what works and what doesn't in this contract," he adds.
Golfer Tiger Woods lost a bevy of brands after facing allegations of adultery a few years ago. These included Gillette, Gatorade, Accenture, AT&T and Tag Heuer.
But as Vijay Narayanan, head of marketing at electricals major Havells, says, the episode might not be a personal crisis, but something that was said in public. "Brands will have to factor the unpredictable in their contracts in this 24x7 digital age. As an advertiser, you never know when or where the next shot will be fired," he adds.
With a sedition case now filed against Aamir and his wife Kiran Rao in a Bihar court on Wednesday under sections 153 (A),(B) and 124 (A) by advocate Sudhir Kumar Ojha, the actor has only dug himself into a deeper hole.
Source:http://www.business-standard.com/article/current-affairs/aamir-khan-speaks-brands-get-the-jitters-115112600038_1.html
