#BoycottBollywood has been trending for the last many months in India. As an unapologetic Bollywood or movie fan and an economics enthusiast, these events intrigued me about the overall boycotting culture. So, here is my analysis of it through (only) an economics lens and what businesses, in general, can do in such situations.

Boycotting for Good?

Boycotts are peaceful protests signalling something is wrong. From boycotting companies that promoted racism to India’s freedom movement, we have many examples, where boycotts for prosocial values, inclusivity, freedom and peace have been successful across the world. The conventional wisdom or perception is that those narrow-minded or bigoted businesses should not survive in the long run. It assumes that over time, people become more aware of rights and want to promote inclusivity and businesses would like to reciprocate these values. But that might not happen. Nobel laureates Esther Duflo and Abhijit Banerjee in their book Good Economics for Hard Times argue that businesses with conventionally non-inclusive opinions could also thrive because they will get support from like-minded ones.

Rising polarisation and social media echo chambers blur the lines of good vs. bad and moral vs. immoral. People with different sets of views have got their voice, which is a good thing without a doubt. But that has made businesses vulnerable to boycotts from varied social groups. One set of people would want the final product or service and would not care who and how that is delivered or endorsed. But there would remain a large section of society who would object to these aspects. Businesses can no longer ignore any sentiment.

SOS Situations

What can businesses do when their product or service is being boycotted?

Philip Kotler, the father of modern marketing, writes that both parties should try to settle the issue either by convincing the other party or accepting the changes. If no agreement can be reached and the boycott gets started then the company must explain its position and seek support from its customers, employees and other stakeholders. We have seen recently how a 15-minute grocery delivery start-up faced a backlash from people concerned about health issues related to delivery executives. The management had to explain how their logistics work and convince consumers that it ensures the good health of delivery executives.

Companies need to be cautious, proactive and all-ears to any such ongoing incidents. Marketing and PR teams must be always ready. If the situation becomes ugly, all companies within an industry can come together to address the prevailing issues. But it is possible in a few industries which are relatively smaller and/or more organised. The film industry, and especially Bollywood, might be the last one to come together due to its fragmented nature. That said, there is no rule book that anybody can follow. Companies may choose to stay silent, discuss with the other party, or even dismiss the other party outright. There will be different effects at different times.

Another conventional wisdom which can be challenged going forward is that these trends would no longer be restricted to social media. Social media opens a platform for everyone to express displeasure or anger in an unfiltered and anonymous manner. When people see their action of boycotting a movie or a brand become successful even on the ground, they could further misuse their power. Therefore, no one can predict the whens and whys of boycotts. Although there is a famous saying that ‘The public’s memory is short‘, it just takes a WhatsApp forward or an old tweet from someone to rekindle those memories. Companies or industries should, therefore, not take their customers for granted or dismiss such trends.

The Boycott Narrative

Robert Shiller’s Narrative Economics book offers one of the best explanations. He writes that such a narrative recurs when there is a broad-based undercurrent of social opprobrium. He emphasises that these narratives are important because “they affect people’s willingness to spend and willingness to compromise”.

But the issues at hand don’t pertain to economics every time. The Duflo-Banerjee duo believes that traditional economics is not equipped to help in such matters. They believe that societies, communities and their norms need to be studied more. Elinor Ostrom, the first woman to receive a Nobel Prize in economics, studied communities across different parts of the world.

She found that communities thrive because of common norms that community members are supposed to follow to gain member benefits. Anyone who violates those norms will be punished by the rest of the community. If the violators fail to punish them, then they will also be punished. The chain of violations and punishments goes on and that’s how it cascades. We have seen that happening recently. When an actor appreciated the movie Laal Singh Chadha, people started boycotting his movie too.

Now the main question is – When and how can this be stopped?

Well, again, there is no clear answer. Shiller writes that boycotts can last as long as the narrative behind them is strong. Once the underlying narrative weakens, the boycotts stop. He also states that bad economic conditions have been a general cause of boycotts across the world and when economic conditions improve, calls for boycotts also fade.

Now, in the case of Bollywood, we have to wait for a turnaround – either within the industry, the underlying narrative, a super blockbuster hit, economic conditions, or a combined effect of all of them to make things better.

– Swapnil Karkare

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Sources and Further References:

Good Economics for Hard Times: Better Answers to Our Biggest Problems – Authors: Esther Duflo and Abhijeet Banerjee – Official Website, Amazon, Wikipedia, Goodreads

Narrative Economics – Author: Robert Shiller – Princeton University Press, Amazon, Goodreads

“Consumer Boycotts: An Essential Method of Peaceful Protest” – Philip Kotler, Marketing Journal

Boycott Culture: How brands tackle aggressive social media dissent, Campaign India

Can #Boycott be good for business and brands?, Economic Times

Boycott, Ban, Brands, Marketing, and Whatnot…, Ranjan Das, LinkedIn

What to Do if Someone Is Boycotting Your Business, American Express

When Consumers Boycott Businesses, Does It Work?, Go Banking Rates

Q&A: Here’s when boycotts have worked — and when they haven’t, Los Angeles Times

The Success and Failure of Consumer Boycotts, Hub Pages

Image by Rochak Shukla on Freepik