Snapdeal Not to Renew Contract With Aamir Khan: Intolerance Row

E-commerce giant Snapdeal have decided not to renew its contract with PK star Aamir Khan, after Aamir Khan got entangled in the ‘intolerance’ controversy. For the same reason, Aamir Khan’s contract with Incredible India was also not renewed.

While there are many who feel that Snapdeal should have retained Aamir Khan as the brand ambassador, considering the fact that Aamir Khan was instrumental in increasing the brand awareness of Snapdeal and helping it bring on par with the likes of Amazon & Flipkart, business experts feel that this is the right business decision to make.

Replying to one of the tweets (which said that Snapdeal’s statment that it shouldn’t face consequences due the @aamir_khan’s statement is like BJP saying it shouldn’t be liable for Sadhvi Prachi’s statements), Sachin Bansal (co-founder os e-commerce platform Flipkart which then took over Snapdeal) said it was a flawed logic.

So is this the only reason (Aamir Khan getting entangled in the intolerance controversy) that Snapdeal decided not to renew the contract with the ‘3 Idiots’ star?

Here’s another perspective given by a business analyst.

The e-commerce market in India is seeing fierce competition between the top players, and Snapdeal has been feeling the heat of rising debt. Add to that, Aamir Khan is one of the highest paid celebrities (especially when it comes to endorsements). Because Aamir Khan endorses only 2-3 brands (similar to his strategy of doing films), Aamir charges a hefty amount for brand endorsements.

Aamir KhanReportedly, Aamir Khan was paid close to 15-20 crore rupees (around $3 million) by Snapdeal (Aamir Khan charges many times over Shah Rukh making him one of the most expensive ‘brands’).

Considering this aspect, it definitely does not make any business sense for a loss-making company to have an expensive brand ambassador, particularly when the ambassador is currently involved in a controversy and bringing in bad press for the parent company.

Here are a few examples where the brand ambassadors were dropped after they did or spoke something in public that hurt the brand.

  • Lance Armstrong (Cycling Champ) – After it emerged that he had been taking performance-enhancing drugs, Lance Armstrong lost lucrative sponsorship’s’ with Nike, Trek Bicycle Corp, and more.
  • Michael Phelps (winner of the most Olympic gold medals in history) – After a photo emerged of Michael smoking a bong at a party, he lost sponsorship with Kellogg.
  • Donald Trump (US President Candidate) – After his racist comments where he said that most Mexican immigrants were rapists and drug dealers, several leading firms in the US (NBC, Univision, and more) dropped him as their brand ambassador.