Photo of Nike shoes are seen in a shop in Huaibei, Anhui province, March 16, 2017. [Photo/China Daily]
Multinational companies are being urged to observe local laws and fully respect consumers' rights, after Nike Inc and two Japanese firms were criticized by a program on China Central Television on Wednesday.
The annual consumer rights protection gala, which aims at uncovering abuses by companies, said the labels of Muji, a Japanese household and consumer goods brand, concealed the fact that some products were made in areas with import restrictions related to possible contamination from the Fukushima nuclear accident in 2011.
Japanese snack food maker Calbee Inc was accused of making some of its cereals in areas also under trade curbs due to the nuclear incident.
Nike Inc was accused of falsely advertising its Hyperdunk basketball sneakers with cushions inside, which they do not have in China, its second-largest market.
Shares of Tokyo-listed Ryohin Keikaku Co Ltd, the retailer and wholesaler of Muji, fell 1.23 percent to 23,330 yen ($205) on Thursday. Shares of Tokyo-listed Calbee dropped 2.94 percent to 3,955 yen when it closed on Thursday.
The unwelcome publicity comes at a time when Nike faces fierce competition in the United States, and is counting on the China market, where its sales surged 17 percent in the latest reported quarter, for revenue growth.
Companies such as Ryohin Keikaku and Calbee are also banking on China's huge market for growth.
Neil Wang, president of market research agency Frost & Sullivan Greater China, said no matter if it's international or domestic brands, it's critical for them to treat all consumers responsibly and equally.
"Consumers are getting more and more active in protecting their rights. With the rapid development and popularity of social media, it is also absolutely essential for brands to pay full respect to comments on social media," he said.
"The effective implementation of product launches, after-sales services and call-back systems in different countries and regions is indispensable for a sustainable brand image."
Muji's branch in Shanghai said in a statement that the address it printed on its products refers to the company's registered address, instead of the place of production. It did not import and sell any food contaminated with radiation, and it has obtained all required import certification from the Chinese government agencies.
Nike said in a statement that it has a wrong description on its official website of the Hyperdunk shoes, and the company said it had apologized to consumers and offered refunds. Nike also said that it would cooperate with the government regulators on the issue.