China Consumer

All bark, no bite

Consumers are growing disinterested in China’s Consumer Rights Gala

Volvo-Touareg-SUV-w

Volkswagen features regularly in CCTV’s Consumer Rights Gala show

Since 1985, Watchdog has been a regular fixture on the BBC’s programming schedule. The show is a champion of consumer rights, uncovering malfeasance in small and large companies and reporting their findings to the public.

Whereas each series of Watchdog runs on a weekly schedule, China’s version is limited to a once-a-year special: CCTV’s 315 Consumer Rights Gala, so-called because it airs on March 15, or International Consumer Rights Awareness Day.

In the past, the run-up to March 15 left companies anxious, unsure if they were going to be a highlight of that year’s Gala. Any firm unfortunate enough to feature would promptly scramble to clear their name, leading many viewers to consider the Gala as a training exercise for PR companies.

But according to Reuters, the show’s fixed-date is starting to work in favour of the companies. “It’s definitely tougher now to do this show,” an anonymous source said. “Many firms start taking precautionary measures half a year in advance”. Those precautions could involve ensuring that their services are up to standard – arguably a success for the Gala ¬– or guarding against sleuths gathering information for the show.

This year, Volkswagen gave a clear example of the difficulties facing the show’s producers. The carmaker has featured on three of the last five Galas: in 2013 over issues with its gear box, and in 2015 along with other foreign carmakers for poor service (see WiC275). It made the show again this time.

With China facing a slowing growth rate in new car sales (just 3% last year, down from 13.7% the year before), the magazine Nikkei suspects the renewed criticism of VW is part of a bid to encourage consumers to buy China-made brands.

VW’s offence this year was an issue with drainage valves on its Touareg SUV marque. Owners had complained that the vents at the front of the car accumulate rainwater and cause the engine to flood. CCTV reported that numerous dealerships had denied that the manufacturer was at fault, insisting the owners must have driven into flood water. However, the company still issued a recall of the affected cars days before the show aired, making the report a little less dramatic.

Zhang Ning, a research fellow at the Chinese Academy of Social Sciences, told the South China Morning Post that it is true foreign brands are featured more frequently than domestic ones, but added that “consumers are smart and can tell whether it’s an ideological disagreement or indeed a quality problem that leads to the mention of the company by CCTV.”

One local firm the Gala called-out was Kuqi, a bike-sharing start-up that went bust and took some Rmb1 billion ($156 million) in user deposits with it. Chinese authorities have long been struggling with the scourge of shared bicycles and have strived to introduce regulations. According to the China Consumers Association 34 of a total 70 bike-sharing companies shut down in the past year.

With the problem so well-known, many viewers felt its inclusion was emblematic of the show’s reduced influence from its headier days in 2013 when it extracted a rare apology from Apple. One key opinion leader commented on social media that this year’s show was “boring” and wrote on his weibo that the Gala was only interesting when it proved “lethal” for a company.

Reuters reports that online discussion of the Gala has dropped sharply since 2014 with younger viewers declining to tune in. Meanwhile reports from Sina suggest that consumers are more interested in everyday issues, such as food safety.

The Gala did attempt to address food safety last year but, in an ironic twist, the move became bad PR for the Gala itself. CCTV had accused Japanese-brand Muji of selling food grown in areas contaminated by radiation. However, Muji was quick to refute the claim, pointing out that its headquarters were in a contaminated area, but its products were sourced from other locations. Netizens rallied behind the brand and ridiculed CCTV for getting its facts wrong (see WiC359).


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