China Broadcaster Targets Companies on Consumer-Rights Day; Nikon, Alibaba Accused of Service and Quality Issues During Prime-Time Show

China Broadcaster Targets Companies on Consumer-Rights Day

Nikon, Alibaba Accused of Service and Quality Issues During Prime-Time Show

LAURIE BURKITT

Updated March 15, 2014 9:06 p.m. ET

BEIJING—China’s powerful government-controlled television broadcaster took aim at Japanese camera company Nikon Corp. 7731.TO -4.09% on Saturday in its annual campaign to stamp out service and quality problems that stifle the country’s domestic consumption.

In a two-hour prime-time show, held in honor of World Consumer Rights Day, China Central Television accused Nikon of selling faulty cameras and skirting warranty policies. The report said many consumers found black spots repeatedly appearing in photos taken with the D600 Nikon camera model.

“Nikon’s attitude is to avoid, conceal and offer excuses, making many people disappointed,” a CCTV presenter said in the broadcast.

Nikon wasn’t immediately available for comment. China is a key market for the Japanese camera maker.

The broadcast also targeted Chinese e-commerce giant Alibaba Group Holding Ltd., alleging the company’s ZhiFuBao payment system has a loophole in its password protection, exposing consumers to the risks of stolen accounts.

A spokeswoman for Alibaba’s payment systems said the company has “robust security and risk management” and monitors transactions closely at all times.

The 315 broadcast, as it is known in China for the date of consumer rights day, has become an annual tradition that attempts to empower consumers and crack down on poor business practices in the country.

China’s leaders are looking to consumers to boost purchases at home and pave the way for a consumption-led economy. But poor product quality and safety problems have played a role in muffling consumer spending.

People at multinational companies typically brace for the broadcast, which has in the past targeted such companies as electronics giant Apple Inc., AAPL -1.12% car maker Volkswagen AG and fast-food company McDonald’s Corp.

CCTV’s report last year alleging Apple skirted warranty periods and adopted biased customer-service policies for Chinese customers resulted in an apology letter signed by Apple’s Chief Executive Tim Cook. Mr. Cook vowed to revamp aspects of its customer-service policies in China.

Saturday’s broadcast was far more muted than last year’s, which included performances, such as a consumer-rights rendition of the rock band Journey’s “Don’t Stop Believin’.” The lyrics began with, “Life presents problems, please don’t give up/Let us maintain our rights/Shed a smile and believe tomorrow will be better/To repair life with a smile.”

There was no song and dance this year.

CCTV has come under fire in recent months, with consumers criticizing its frequent exposes of companies. Some blasted it in October pinpointing Starbucks, saying the company profits off Chinese consumers by charging as much as 50% more for some of its products in China than in some other countries. Starbucks said its prices vary by market because of different costs, such as for labor, commodities, real estate and infrastructure investment.

While many have scoffed at CCTV’s reports, the media company has had long-lasting impact on some of its targets. Yum Brands Inc.’s KFC chicken chain suffered slumping sales last year after CCTV spurred a widespread media backlash over the use of growth hormones and antibiotics by two KFC chicken suppliers.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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