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Exposé shames Apple, Volkswagen

Mar 15 2013 18:33 Reuters
consumer


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Shanghai - Technology giant Apple and car maker Volkswagen were singled out by state-run China Central Television (CCTV) in its annual corporate malpractice exposé.

On its "3.15" investigative special aired late on Friday, CCTV said that Chinese customers were not given the same post-sales service from Apple as it gave to users in other markets.

The report also said that the direct shift gearbox (DSG) transmission, a long-standing issue for Volkswagen, was causing cars to speed up or slow down during driving.

Volkswagen, which plans to almost double production capacity in China to 4 million cars in the next five years, promised action in response to the "3:15" show, whose name refers to the date of World Consumer Rights Day.

"We take this report very seriously and we will quickly make contact with our consumers to resolve the issue," it said on its official Chinese Weibo microblog.

Apple officials in China and Apple's headquarters in Cupertino, California, were not immediately available for comment.

The television show has named and shamed a number of prominent Western companies in the past, hitting the sales and stocks of its targets in a retail market that is forecast to be the world's largest in three years.

Last year "3:15", one of the most widely watched in China, singled out fast food giant McDonald's and French hypermarket chain Carrefour SA for food safety violations.

The companies were forced to apologise and their shares slumped as China's army of half a billion microbloggers unleashed their anger online.

US retailer Walmart Stores and Korea's Kunho Tire have also previously been blasted by state TV on Consumer Rights Day.

Safety concerns

In December, a separate state television report triggered a food safety scare at Yum Brands restaurants, cutting its China same-restaurant sales by 20% in January and February.

Chinese companies have also not been spared.

Public concern about food safety, pollution and corporate corruption has intensified over the last few years, after state media exposed malpractice at local firms including web search engine Baidu Inc and milk producer Inner Mongolia Yili Industrial Group.

"These TV exposes create the impression that you can't trust that brand," said Torsten Stocker, head of Greater China consumer practice at Monitor Deloitte. "If there's some smoke then maybe there's much bigger fire."

In a bid to pre-empt any negative publicity on Consumer Rights Day, some companies launched customer-friendly promotions ahead of the TV show.

McDonald's will give out free breakfasts on Monday and Walmart launched an "adopt-a-tree" campaign.

But some Chinese consumers said that the revelations from the "3.15" show would nonetheless have a significant impact on their choice of products in the future.

"I think the exposure of these companies makes them hard to believe again, at least I myself will boycott these companies," Sherry Chen, a clerk at DBS bank in Shanghai, told Reuters in the city's affluent financial district ahead of Friday's show.

The show also stirred up vitriol online in China. Within an hour of the broadcast, Apple had been mentioned 50 000 times on popular web microblog Weibo, China's version of Twitter which has more than half a billion users.

While many posts on Weibo were negative, the targeted companies may take solace that some users were not entirely convinced by the "3.15" show, which is a colourful mixture of under-cover footage and pro-consumer song-and-dance routines.

"Tonight's 3.15 hit out against corruption. But the most fraudulent thing at the end of the night was the show itself," posted Weibo user 'Soledad Horse'. "Oh CCTV, can't you try and find some intelligence from now on?"



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