China Consumer

Into thin air

This year CCTV’s consumer rights show had Nike in its cross hairs


March 15 has become a day that China’s public relations industry dreads. That’s because each year, the state-run broadcaster CCTV hosts a two-hour programme called Consumer Rights Day to highlight corporate misdoings.

Over the years the so-called ‘315 Gala’ has targeted multinational firms from Starbucks to Apple and Jaguar Land Rover to Volkswagen. Its criticisms have had an adverse impact on brands: for instance, KFC saw sales plummet when the broadcaster accused the fast food giant of selling chicken laced with antibiotics and growth hormones.

Small wonder that PR executives around the country are glued to the television during the broadcast so as to be able to react quickly if the company they represent gets singled out.

Beijing Morning Post calls the day an annual test for PR folk. If they respond too slowly, the company looks incompetent. If they don’t sound remorseful enough, consumers think they are insincere.

“Pretty much all the big corporations have their PR machines ready to jump into action because they’ve seen what happens when companies are not prepared,” James Feldkamp, chief executive of Chinese consumer watchdog Mingjian, told Reuters.

This time round, Nike found itself on the chopping board. The sportswear label was called out for misleading consumers about the high-tech air cushions in some of its Hyperdunk basketball shoes, with CCTV saying that the shoes don’t in fact have these cushions.

The next day, the US giant blamed an inaccurate product description and initially offered to refund the price of the shoes to those who bought the Hyperdunks. Then showing even more remorse, Nike later upped the ante and offered to refund Rmb4,500 ($653), three times the Hyperdunk’s original retail price (it’s estimated only 300 people had bought the mislabelled shoes).

One reason for the overreaction is that competition is closing in on Nike, which derives 10% of its revenue from the Greater China market. Even though its market share in China has reached 17.4%, rival Adidas is closing the gap with 16% share. Another recent survey also showed that amongst female consumers, 22.2% preferred Adidas, compared with 20.3% who favoured Nike, reports Beijing Business News.

It wasn’t just Nike that was having a bad day: to demonstrate that it is not biased against foreign firms CCTV also threw a few small local entities under the bus. The broadcaster took aim at unlicenced osteopathic doctors for scamming elderly patients, animal breeders for using antibiotics to make animals grow faster and, a Wikipedia-like website, for becoming a portal for fake news and scams.

But not all CCTV’s attacks stuck: in particular, its claim that Japanese brands like Muji (which sells packaged foods as well as household products) had been putting the health of consumers in danger. This caused enormous controversy online.

During the segment, CCTV said Muji’s Japanese vendors had been lying to Chinese consumers by selling food products that were made in an area where high levels of radiation were detected in 2015. China has banned food imports from the said area since the nuclear meltdown six years ago.

Muji’s parent company Ryohin Keikaku quickly denied the accusation, saying that the address printed on its food labels was the company’s headquarters and did not indicate where the food items were produced.

“CCTV, please take some Japanese lessons before making these baseless accusations,” one netizen quipped. “These people need some common sense… It’s not just Muji, companies like Shiseido and SK II all list different addresses for production and corporation,” another added.

In fact, the 315 Gala has garnered its own share of critics, with some viewers boycotting it as politically motivated (a US and a Japanese firm being singled out on the show was hardly a shock, the bigger surprise being that a South Korean firm didn’t feature this time). “This year’s show was a laughing stock, there weren’t any really big cases in there,” one weibo user wrote. “Why do they still bother holding it?”

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