Multinationals have ignored Chinese consumers at their own peril and are losing out to domestic enterprises, according to a survey released yesterday.
The one-year research by Baidu.com the most popular domestic search service website showed that domestic brands have overtaken foreign ones for the first time in terms of consumer favor.
Zhou Min, in charge of the research at Baidu, said multinationals should introspect to find out why they are losing ground. Full details of the survey have not been released.
According to a Fortune Global 500 in China report by the influential Nanfang Weekend newspaper in November, as many as 30 percent of the 126 companies surveyed were involved in quality incidents last year.
Zhou cited P&G's flagship cosmetics brand SK-II which in September was reported to contain poisonous chromium and neodymium as an example.
Although the product was later declared safe by authorities, "consumer preference shifted to domestic brands when they tracked the three-month probe of SK-II," he said.
Foreign brands used to enjoy popularity in China; and many would rather pay a high premium for them.
But now, Chinese consumers are more aware of their rights and demand they be treated the same as their foreign counterparts, said Ning Xiangdong, executive deputy director of the National Center for Economic Research at Tsinghua University.
"Multinationals should behave as honestly as in their home countries and show a good sense of corporate citizenship," he said.
But many multinationals have failed to do that.
Last year, 343 consumers filed a class action complaint with the China Consumers' Association, saying there were some faults in Kodak's LS443 digital cameras. The case is pending.
While the company offered free replacements of faulty cameras in Taiwan, it refused to do so on the Chinese mainland.
But with the Internet, Chinese consumers get first-hand information about other markets and know how to protect their rights.
Ma Yue, a consumer rights lawyer, said the awareness of consumers is fundamental to protection of their rights.
(China Daily March 15, 2007)