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Why int'l brands treat Chinese consumers arrogantly

(People's Daily Online)

08:10, July 05, 2012

Certain major multinational corporations' arrogant and irresponsible practices toward Chinese consumers have caused quite a stir in China, including Toyota Motor's secret recall of its Crown sedans, Apple Inc's overbearing repair policies, and the refusal of Hermes and some other luxury brands to provide product inspection services.

Certain multinational corporations that spare no effort to promote their brand value and reputation have quickly forgotten their commitments to consumers after entering the Chinese market, and even started treating Chinese consumers outrageously.

Industry insiders said that most world-famous companies behave well and treat customers as gods outside China, forming a sharp contrast to their behavior in China. While reaping huge profits in China, they are treating Chinese consumers unfairly and arrogantly.

Some people attributed this phenomenon to lack of effective regulation and Chinese consumers' immature attitudes toward consumption.

Experts believe that this phenomenon occurs mainly due to two reasons. First, there is a lack of communication and coordination among relevant regulatory authorities, third-party research institutions, and companies. Second, China's national standards are different from foreign ones, and the country is technologically unable to carry out specific assessment of the safety and other aspects of certain products. In addition, there are no authoritative third-party inspection institutions in China to restrict and form public opinion pressure on foreign brands.

Tao Ailian, deputy secretary-general of the Shanghai Commission of Consumer Rights and Interests Protection, said that the cost of breaking Chinese laws and regulations is relatively low, failing to deter world-famous brands. By contrast, any company violating antitrust laws in E.U. countries can be fined up to 10 percent of its annual revenue.

Another reason is that the collective power of Chinese consumers is weak and that has reduced after-sale costs of international renowned brands. The director of the Modern Marketing Center under the Shanghai University of Finance and Economics Chao Gangling said that Chinese consumers have not formed a collective pressure on merchants, and therefore merchants are able to deal with Chinese consumers more easily.

Qiu Baochang, the head of the legal group of the China Consumers' Association and a chief lawyer of the Huijia Law Firm of Beijing, said that, although the Civil Procedure Law of China prescribes contents regarding the joint action, consumers' associations of China still cannot represent Chinese consumers to safeguard their interests. In addition, an individual consumer is of course unable to confront a multinational enterprise due to such reasons as the time, law knowledge and cost.

Regarding the phenomenon that workers of agents and stores of international brands always make excuses so that international brands have chances to shirk their responsibilities, Chao believe that China should supervise and administrate agents of international brands more strictly, strengthen the punishment on dishonest enterprises and greatly increase the cost of the illegal action to deter international brands.

Read the Chinese version: 国际大牌:为何敢在中国“耍横”?
Source: People's Daily, author: Zhou LIn and Lu Wenjun

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