• Fri
  • Dec 19, 2014
  • Updated: 11:25pm
PUBLISHED : Monday, 25 March, 2013, 12:00am
UPDATED : Monday, 25 March, 2013, 11:57am

Long-standing myth of double standards haunts multinationals

Onus is on big foreign firms to work together to clear up misconceptions among mainlanders about compromises in production-line quality


Wang Xiangwei took up the role of Editor-in-Chief in February 2012, responsible for the editorial direction and newsroom operations. He started his 20-year career at the China Daily, before moving to the UK, where he gained valuable experience at a number of news organisations, including the BBC Chinese Service. In 1993, he moved to Hong Kong and worked at the Eastern Express before joining the South China Morning Post in 1996 as our China Business Reporter. He was subsequently promoted to China Editor in 2000 and Deputy Editor in 2007, a position he held for four years prior to being promoted to his current position. Mr. Wang has a Masters degree in Journalism, and a Bachelors degree in English.

A long-standing myth among mainlanders holds that Japanese car makers have secretly maintained three quality standards - the cars sold in Japan have the highest quality, followed by those in the United States and Europe, where the protection of consumer rights is strict, and that those sold in the developing countries including China receive less quality control but fetch higher prices because of strong demand and lax regulation.

Of course, Chinese regulators and Japanese car makers have long dismissed this out of hand, while it defies common sense that any company would maintain different quality standards for the same products for different consumers.

Yet the myth not only refuses to go away but has been enhanced by mainlanders who point out that while the Japanese car makers undertook several massive recalls of faulty vehicles worldwide over the past 10 years, the recalls don't often cover those cars assembled in mainland factories.

The myth serves as a cautionary tale to all multinationals trying to cater to the increasingly rich and discerning mainlanders with shifting tastes and fickle loyalty. The multinationals risk losing out and seeing their brands damaged if they fail to react promptly and adjust their marketing and sales strategies to soothe the concerns of the mainland consumers.

On March 15, the day devoted each year to raising awareness of consumer rights, several international brands including Apple, Volkswagen, BMW, Audi and Daimler found themselves in the cross hairs of the mainland media and furious consumers.

Apple was accused of adopting customer-service policies for the mainland consumers that differed from its practices in other countries while Volkswagen was accused of selling cars with substandard direct-shift gearbox systems.

The media reports also alleged BMW and the Mercedes-Benz cars assembled on the mainland contained materials which emitted fumes harmful to consumer health.

Volkswagen was subsequently forced to announce a recall of more than 380,000 vehicles while other car makers said they would investigate the allegations but maintained they applied the same standards worldwide.

Just as some mainlanders suspect the multinationals apply a different quality standard to their products sold on the mainland, some foreign analysts and even officials at those multinationals believe the increased scrutiny targeting foreign companies amounts to nit-picking and is also aimed at protecting domestic manufacturers.

But the truth is that the state media usually hit harder at domestic manufacturers than the multinationals, which have been targeted only in recent years as their market share on the mainland has been expanding rapidly, with some becoming market leaders.

Instead of complaining about the Chinese government's shifting stance, the multinationals should work together to dispel the mainlanders' rising misunderstanding and misconception of foreign brands.

Indeed, while the multinationals have long insisted that they maintain the same quality standards worldwide, many mainlanders persist in believing otherwise, forming their judgments based on anecdotal evidence and hearsay.

For instance, their long-held belief is that the quality of multinational products produced in Western countries is higher than that of the same products manufactured by their joint ventures on the mainland, on the assumption that the joint ventures are more inclined to cut corners in terms of sourcing materials and ensuring consistent quality.

Sometimes the mainland-style management practices employed at those joint ventures can also lead to grievances from mainland consumers.

Several years ago, mainland internet users took offence to a photo taken at the assembly line of Audi sedans at a mainland factory showing a sign urging workers to pay special attention to quality as the batch was for the military brass. That prompted angry comments questioning whether the Audi factory had special quality standards for designated customers.

More often, the mere fact that the multinationals' products, particularly food products, are made on the mainland, seems to have put many mainlanders on edge given the country's appalling food-safety record.

So much has been written about mainland tourists raiding supermarkets in Hong Kong and Sydney for baby milk powder and other daily necessities, causing resentment among locals.

That has made many overseas people wonder why the international milk powder manufacturers cannot ramp up exports, production and distribution on the mainland to satisfy the demand and make serious money.

That is the million-dollar question the multinationals should ponder.


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This article is now closed to comments

Regarding the final comment on International Milk Powder producers....when distributing in Hong Kong, they can on assess what the demand is in Hong Kong. They know there is additional demand in Hong Kong from Chinese tourists, but they can never know how many of the 1.3 billion peoplke will come to Hong Kong to buy milk powder and how much they would buy. That is why the distribution system in Hong Kong was flawed and unworkable. When there was another milk scandle in China, more people bought in Hong Kong. Most people do not really understand he perdiciment that they were in and how HK citizens were destined to always be short enough supply.
it's not a myth but a fact. the author of this article has scant personal market knowledge.
This seems to be more an issue of whether the quality of mainland manufacturing is to be trusted in some sectors, rather than whether the foreign brands actively intend to reduce the quality of products sold in China.
What utter nonsense. Somehow you seem to overlook the problem of Chinese component suppliers debasing component quality standards and specs contrary to supply agreements and then leaving the larger multinational to clean up the mess. Further, your example of the Audi situation encouraging works to "do better for the military order" is not the fault of the Audi, but more the fault of the local Chinese management who certainly know how to kowtow to the provincial and PLA cadres.
I think your article is more appropriate for Peoples Daily than the SCMP.. but then again consider where your editors are from.
Is this article supposed to attack multinationals selling in china or reinforce confidence in Chinese domestic producers for the mainland audience here?
Utter silliness! In every batch there will inevitably be a lemon or two.
Toyota suffered massive recalls of their Prius hybrid cars in the US a few years ago taking a massive blow to the perception that Toyotas were the kings of quality. Good PR, however, and immediate action to fix the problem has not deterred people from continually buying the Prius or choosing Toyota.
Volkswagen's quick acknowledgement of the problem should be a lesson for china where both local companies and the government are always so quick to cover up and deny!
The article is one big contradiction. Starting out on the basis that inferior quality is a "myth" and stating "it defies common sense that any company would maintain different quality standards for the same products for different consumers", it then goes on to present evidence to the contrary including the specific example about building special quality for the military and citing the poor quality record of the food industry. Not only is it common sense that the multinationals do run different quality systems but the facts demonstrate that poor quality manufacturing for domestic consumption in China is no myth. If multinational manufacturing executives had been interviewed by the journalists involved, they would have learnt that it is an extraordinary challenge to transplant manufacturing from one country to another while maintaining identical quality throughout the process. It would be truly remarkable if it were achieved.


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