World (Mar 11, 2021 09:35PM ET)
BEIJING (Reuters) – The annual World Consumer Rights Day, on March 15, has become a major television and social media event in China, with domestic as well as foreign brands singled out for high-profile and sometimes damaging criticism.
World Consumer Rights Day began in 1983, and China began observing it three years later, shortly after the establishment of the China Consumers Association.
WHAT HAPPENS ON CHINA’S CONSUMER RIGHTS DAY?
In recent years, the run-up to March 15 is marked by various consumer education campaigns, with both government-backed groups and brands dispensing consumer rights information.
The highlight is a two-hour prime-time show broadcast by state-run China Central Television (CCTV). Known as the “315 Show”, the programme names and shames brands for issues ranging from poor-quality products, robocalls and illegal collection of personal information to aggressive sales of beauty salon memberships.
Big brands, fearful of being featured, are known to prepare responses ahead of time, just in case.
FOREIGN NAMES SINGLED OUT
Last year, in a broadcast delayed to July because of the COVID-19 pandemic, U.S. fast food chain Burger King and a car manufactured by a General Motors (NYSE:GM) joint venture drew criticism.
In previous years, big-ticket foreign businesses that have come in for criticism have included Starbucks (NASDAQ:SBUX), for charging higher prices in China than they did in the United States, while Apple (NASDAQ:AAPL) was bashed for a then one-year service warranty in China, shorter than in other markets.
Others scolded in the past include Volkswagen (DE:VOWG_p), for engine defects on an SUV; Nike (NYSE:NKE), for misleading advertising; and Japan’s Muji, which came under fire for selling food products allegedly sourced from part of Japan affected by radiation.
Most of the criticism has been of Chinese brands.
In 2016, the programme criticised what it said was the widespread practice of sellers on Alibaba (NYSE:BABA) Group’s Taobao online marketplace to pump up sales figures to boost their credibility on the platform.
Food-delivery company Ele.me, now owned by Alibaba, was once singled-out for working with restaurants that operate without licenses or proper kitchens.
WHAT IS THE IMPACT OF BEING NAMED?
The brand reputations of named companies, and their share prices, can suffer.
Qutoutiao (NASDAQ:QTT), an app that delivers customised feeds of articles and short videos to users based on algorithms, was criticised last year for its advertising practices. New York-listed shares in the company, backed by Tencent, plunged 23% in the trading session following the show.
Named companies typically issue prompt responses, usually via their official acccounts on social media platforms Weibo (NASDAQ:WB) and WeChat, expressing gratitude for the oversight and criticism, and willingness to correct their behavior.Explainer: What is China’s Consumer Rights Day? Add a Comment