Apple learns a lesson in China

PUBLISHED : Thursday, 04 April, 2013, 12:00am
UPDATED : Thursday, 04 April, 2013, 5:41am

Volkswagen recently responded to an accusation on a CCTV consumer rights programme that it sold cars with faulty gearboxes by promptly recalling nearly 400,000 vehicles. On the same show Apple was criticised for having inferior after-sales service for Chinese customers. If it had followed the VW example and acted on the complaints instead of being defensive, it would have spared itself attacks from the state, climaxing in accusations in People's Daily of dishonesty, greed and arrogance. Now it has apologised and doubled the warranty for Chinese customers to two years.

Such is the computer-maker's brand image that the climbdown is unlikely to hurt its sales in its second-biggest market. In fact, sympathetic microbloggers have compared state media's pursuit of Apple with its silence on pollution and food-safety scandals. But speaking out would mean criticising the government. Only five years ago it would have been equally unthinkable for Chinese media to single out a multinational company for such criticism. The need for foreign investment prevailed and the country projected an open-door image.

Now the balance has shifted, and with it mainlanders' sentiment towards multinationals that have built strong positions in many industrial and consumer sectors. Ironically, one reason they are now targeted is that mainlanders have high expectations, in the belief that imports are superior in design and every other way and worth paying a premium for. However, amid growing consumer suspicion of double standards, state media, meaning officials, believe China gets the short end of the stick, to use a Western expression.

The politics of targeting Apple may not end there, given the resentment of American criticism of Chinese IT ventures and news of moves to limit or forbid the use of Chinese IT equipment in the US on security grounds.

That said, state media had a point. Double standards for service in different countries are wrong and bound to run foul of shifting consumer sentiment.

Apple should have come out sooner and addressed the warranty disparity. It has learned a lesson about doing business in modern China which, as chief executive Tim Cook has admitted, may not be the last. For a start, it could be more upfront about replacing phones with refurbished handsets, instead of new ones, even if there is nothing wrong with this. Other consumer-market multinationals, take note.