Foreign forfeit

By Chen Dujuan Source:Global Times Published: 2013-7-8 19:08:01

Foreign firms - including US fast food chain KFC, electronics producer Apple, healthcare firm Johnson & Johnson and sportswear company Nike - have been accused of offering lower standards in the Chinese market. Photos: CFP

Foreign firms - including US fast food chain KFC, electronics producer Apple, healthcare firm Johnson & Johnson and sportswear company Nike - have been accused of offering lower standards in the Chinese market. Photo: CFP


For Chinese people, foreign brands used to be associated with reliably good quality. However, the good image of these brands has been tarnished following a number of recent problems, including price discrimination and lower product quality in China.

This trend was indicated by an online survey of 1,394 respondents from June 3 to June 18, conducted jointly by the Global Poll Center, which is affiliated with the Global Times, and news portal qq.com.

Many Chinese consumers believe that foreign brands' quality has fallen in China and also that these brands treat Chinese people with a different standard from other markets, the survey showed. As a result, many respondents said they had reduced their spending on these brands over the past year. 

The data for the survey was collected through qq.com and the QQ news mobile phone application. The survey is part of an annual survey by the Global Times on Chinese people's view of the world and the world's view of China in 2013. 

Survey results

Among the respondents, 41.8 percent said their impression of foreign brands had become worse over the past year, while just 7.7 percent said their impression had improved.

A total of 30.8 percent of respondents said they had reduced their consumption of foreign brands during the past year, compared with 28.7 percent who raised their consumption of foreign-branded products and services.

When asked if the quality of the foreign products or services matched up to their reputations, 86.8 percent of respondents said that it did not. Among this segment, 46.6 percent believed this was a problem at a small number of foreign brands; 31.7 percent thought it affected a large number of foreign brands; and 8.5 percent said that all foreign brands fail to justify their reputations.

The results are not that surprising as numerous cases of problems with foreign brands have been reported recently.

From January to May, thousands of children's products, made by  16 foreign brands, including GAP, Gucci and Hasbro, have been tested by China's quality watchdog as poor quality.

A report by CCTV in December said that leading fast food chains KFC and McDonald's had used chicken that contained excessive antibiotics and even forbidden antiviral drugs in China.

Later that month, Shanghai Food and Drug Administration said KFC had known about the antiviral drugs in the chicken as far back as 2010 but did not change suppliers immediately after the tainted chickens were detected; nor did it let the public know about the problem.

The market in China offers massive demand for foreign firms, and some Chinese consumers have a blind belief in foreign brands, which is one reason why foreign firms have allowed their quality standards to decline, Liu Baocheng, director of the Center for International Business Ethics at the Beijing-based University of International Business and Economics, told the Global Times Thursday.

Foreign brands should examine their mistakes and quality problems in China, and the authorities should strengthen their supervision of foreign brands, Liu said. 

Double standards

Another issue is that many people believe foreign firms treat Chinese consumers with lower standards than consumers in other markets, with 83.2 percent of respondents saying foreign brands have this double standard.

US healthcare producer Johnson & Johnson (J&J) has come in for criticism several times for treating consumers from the mainland with a diff­e­­­­rent ­standard.

The Beijing-based Health Times newspaper reported on June 9 that among 51 global recalls of products by J&J since April 2005, 48 of them excluded the Chinese mainland market.

American electronics producer Apple Inc only promises to repair iPads within one year after purchase for the mainland market, while the domestic law requires a two-year warranty period for computers, media reports said in March.

The rising number of foreign brands reported to have problems in China is partly due to some brands' irresponsible behavior, but it's also because domestic consumers have an increasing awareness of their rights, Qiu Baochang, president of the legal panel of the China Consumers' Association, told the Global Times Sunday.

Foreign brands should have the same standards for consumers throughout the world, Qiu said.

Some of the brands, which gained a name for themselves for high-quality products and services, are no longer so careful about their reputation, Qiu said. "If they don't respect Chinese consumers, they will gradually lose the huge market," he noted.

Stricter supervision 

The government has been paying more attention to problems with foreign companies' goods and services recently.

China's top economic regulator, the National Development and Reform Commission, confirmed with the media early this month that it has launched a probe into price manipulation and anti-competitive practices by foreign milk powder firms including Wyeth and Dumex.

The China Food and Drug Administration held a meeting in June with J&J following reports about the firm's failure to include the Chinese mainland in many of its global recalls.

It asked the company to improve its management to ensure product quality, and said that all drug producers must launch simultaneous recalls in the mainland whenever they issue global recalls.

The Beijing Administration for Industry and Commerce (BAIC) fined US sportswear company Nike Inc 4.87 million yuan ($794,297) in October 2012 for false promotion of one of its basketball shoe products, after the product sold in the mainland was found to be of lower quality than the one sold in international markets.

This made Nike the first foreign firm to be fined by the BAIC for treating mainland consumers with lower standards.

It shows that the government has become more service-oriented and responds quickly to problems, Liu said.

Qiu said the authorities should not only strictly punish firms that infringe China's laws but also let domestic consumers know about the problems. The government should also enhance its quality standards to be in line with international standards so that large brands cannot get away with lower standards in the domestic market, he noted.

Consumers should also abandon their blind belief in foreign brands and be more proactive in reporting problematic products to related authorities and protecting their rights, Qiu said.

But, Liu also expressed his concern that Chinese authorities may punish some foreign companies in order to protect domestic firms, which would discourage foreign companies from investing in China.



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