Discerning consumers put traders on notice over rights

PUBLISHED : Monday, 03 April, 2006, 12:00am
UPDATED : Monday, 03 April, 2006, 12:00am

Retailers will have to offer better service and build reputations for honesty if they are to survive in an increasingly discerning market.

Consumer researchers say that in addition to wanting the best quality for their yuan, there is growing public awareness of consumer rights.

China Academy of Social Sciences' National Institute of Law researcher Liu Junhai, a long-time consumer rights advocate, has noticed mainlanders have become more discriminating, and aware of laws that protect them.

'Consumers are more aware of their rights, they are smarter, more sensible and intelligent about what they buy. They are more careful and critical about quality, and other aspects, such as service attitude, purchase convenience, and the credibility of the operators,' said Mr Liu.

The consumer protection laws were introduced 12 years ago and despite well-publicised problems customers have faced in redressing any infringements, the basic idea of consumer rights has been widely accepted.

'Now, almost everybody knows there is a law called the Consumer Rights Protection Law, and everybody knows they can complain about their cases to the administration on Consumers' Day. These are all achievements of the past 12 years,' Mr Liu said.

Consumers also have a key role in the future of the economy, with central government regularly emphasising the importance of raising domestic demand to keep GDP growth around 8 per cent over the next few years.

Ren Xingzhou, director of the State Council's Market Economy Research Institute, said earlier this month that since 2003, more than one-third of the country's GDP had been generated by consumption and the spending was crucial to the stability of the domestic market.

Ms Ren said national reforms, including medical, education and housing reforms, had radically changed the role of consumers and their spending patterns. They had also sparked disputes between consumers and operators, particularly in the car, mobile phone and electronic goods sectors.

But analysts say that even if consumers' expectations are higher, there is little reason for businesses to care about the negative impact of cheating because the legal consequences are so low. Despite this, consumers filed 730,485 cases last year with the State Administration for Industry and Commerce and pursued their claims through the courts, the China Consumers' Association and the media.

'Some consumers are very persistent in pursuing for their rights for compensation and this group is growing gradually,' Mr Liu said. Every province, city or even districts offer complaint hotlines. According to 2005 statistics from the China Consumers' Association, 702,822 complaints were processed by consumers' associations at various levels, 672,964 of which were successfully settled and retrieved more than 686 million yuan in compensation.

In addition, 4.34 million consumers visited or inquired at the associations last year.

Mr Liu said there had been a misguided preference in economic development for emphasis on the welfare of businesses and business people rather than consumers.

'It's crucial for the government and enterprises to realise that the protection of consumers is the ultimate way to protect and expand domestic demand,' he said. 'People think businesses contribute to national taxation revenue, but actually it is consumers who contribute.'

Mr Liu said competition and respect for consumers would rise, especially in retailing, as multinationals moved in to the market. Local players will have to treat clients better to survive.

'To treat consumers well is not an empty slogan, but a very solid concept,' he said. 'Insightful entrepreneurs should spare no effort to cultivate their best consumers but the ultimate effective way of cultivating this market is to cultivate their own honesty.

'There is much for wise entrepreneurs to think about in terms of product design, quality control, pricing, advertising, after-sales service, management and all the other aspects.'