Nike, Muji targeted in China consumer rights exposé

A Chinese state-run TV show yesterday singled out Nike and Muji for misrepresenting some of their products to consumers.

Every year on World Consumer Rights Day (dubbed 3.15 in China), China Central Television (CCTV) screens a ‘name and shame’ of companies alleged to be taking advantage of the general public. On 15 March, the program, ‘3.15 Gala’, said Nike falsely promoted certain basketball shoes as having Zoom Air sole technology, and that Japanese retailer Muji mislabeled food products from a part of Tokyo where radioactive contamination was detected in 2015.

More than 10 percent of Nike’s global sales come from Greater China. The brand reportedly admitted that 300 pairs of its Hyperdunk sneaker were sold on the false premise of having airbags in the sole. The brand later reached out to customers to offer compensation. Reuters reported that a spokesperson from Ryohin Keikaku, which owns Muji, denied the company was selling food products from any parts of Japan where exports are banned due to high radiation levels. The allegations levelled at Muji are doubtful: World Health Organization guidelines state Japanese products are fit for export except for those originating from a limited area in the immediate vicinity of the Fukushima nuclear disaster.

Dennis She, senior manager of business development at Craft Communications, an agency in Shanghai, told Campaign Asia-Pacific it was "peculiar" that Muji had come under attack. "If these products are questioned for their potential of radiation danger," he said, "why weren't they spotted by the Chinese authorities earlier given that there are so many processes needed before a product can be listed and sold?"

As for Nike, QC Liang, president and CEO for China at H+K Strategies, felt the brand's sales will withstand the criticism. "I think the CCTV critism was fair, and actually it is kind of mild this year," Liang told Campaign. "The criticsm is spreading quickly and getting widely picked up by media in and outside China. False advertising is not unique to Nike. For this case, it is pretty isolated, so I doublt it will affect much of Nike sales. The damage is more to its public image."

CCTV’s exposé has run since 1991 and combines undercover investigations with entertainment. The program has lost some of its impact in recent years, and last year was criticised for failing to expose anything consequential. But it still puts brands—foreign and Chinese—and communications professionals on edge given the vociferous nature of consumers in the market and the speed at which reputational damage can spread on social media. In 2013, Apple apologised after being shown to offer substandard after-sale service.

This year's 3.15 Gala ended up being less hard-hitting than predicted. "Overall the CCTV report this year is quite mild and provides more neutral facts, to let consumers judge if they should trust the brands or not," Maggie Chan, head of Newell Public Relations' China operations, told Campaign Asia-Pacific.

Yet one observer felt that even minor mistakes by international brands deserve exposure. "Often, it is said that Chinese goods are fake and shoddy, and foreign brands make only small mistakes in quality," said Han Ying Wei, general manager of O2O Orange Real Estate Consulting (an agency that works with real estate clients). "This implies inequality. The fact is, the consumer hates all kinds of hiding and lying. All businesses should do the right thing, or they will pay the price for deceptive behavior. And if you're wrong, you're wrong. Do not hook it to politics."