How China Could Resolve Its Growing Consumer Crisis

October 29th, 2008   •   4 comments   

Empty milk shelves in China (Courtesy of Wikimedia Commons)
One after another bad news came thick and fast for the middle kingdom. And then some more.

First up were the contaminated pet food which caused the deaths of many precious pooches and kitties in the West. Next were the dangerous levels of lead found in the paint of toys manufactured in China. Major toy makers like Mattel were literally caught with their pants down and they had to take quick action.

Of course, everybody’s imagination was caught when cute as a button Lin Miaoke sang like an angel during the recent Beijing Olympics Games in August. Unfortunately, that turned into a nightmare when it was discovered that another cute but perhaps less beauteous child Yang Peiyi was the voice behind the singing.
The icing which took the cake is literally in the icing – or rather the melamine tainted milk in the icing. This was probably the biggest blow to China’s reputation as the world’s manufacturing hub. More than 54,000 babies and toddlers were sickened, with four deaths, by the dastardly deed by a major Chinese milk factory. As if that’s not bad enough, the very same melamine is now found in eggs! What’s especially bad in both instances is that the disclosure only came after somebody else detected it.

Could the Chinese authorities have done more to prevent this snowballing crisis of confidence? Yes, I believe so. Here are my thoughts

First, they could have been faster with the truth and to reveal it themselves rather than wait for somebody else to burst the bubble. With hundreds of millions of Chinese online, you cannot expect people to just shut up and endure what has been burning in their hearts and minds. It is better to be early with the bad news and get over and done with it, rather than wait until it festers.

Next, they should have been more open with the extent of the problems. Transparency and honesty works in a crisis situation. Trying to fudge it or hide it just doesn’t cut it in the age of online-enabled openness.
One also needs to also put one’s actions where one’s mouth is. It is heartening to hear the Chinese leadership proclaiming that they will take firm action against the perpetuators. However, it isn’t enough. What China needs to do now is to do a massive clean up exercise and embark on its own investigations of the entire food supply chain. And to do it quickly. Johnson & Johnson did it with Tylenol and it has paid off in the end.
It is also important to pay attention to the groundswell of public opinion. With the prevalence of social media platforms like blogs, forums, bulletin boards and internet messaging, the millions of ordinary Chinese citizens are now the media. They are empowered as citizen journalists, each with their own independent (and often strong) views, opinions and thoughts. Ignore the blogosphere at your own peril!
Finally, China needs to think less of saving face and more of saving lives (and its reputation). It is better to eat humble pie now, cry a little and be truly remorseful early rather than late. Say you are sorry from the onset, and perform an extraordinary feat of public good and win back that lost confidence. It was a real pity that they didn’t include Yang Peiyi in the closing ceremony of the Olympic games because that would have been a major coup.
What do you think about China’s efforts to curb its consumer crisis?

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4 comments

  1. Ed
    posted on Oct 29, 2008 at 11:25 PM

    Well, so many people (or manufacturers) who are trying to remain hush-hush over the issues just don’t realized, they are the same people who are creating these crisis in the first place.

  2. Anonymous
    posted on Oct 30, 2008 at 5:12 AM

    I believe the root causes may reside at a systematic level of many of their regulatory agencies and manufacturing practices.

    One thing was telling from all these incidences you mentioned. No one wanted to take responsibility for it.

    The regulatory agencies said they can only guarantee compliance based on samples submitted and since they don’t have the legal jurisdiction to conduct on the spot, random sampling. They absolve themselves from all liability.

    The manufacturers claimed they were using bona fide approved products.

    Unless a regulatory and manufacturing framework that manages to close the loop is in place.

    I don’t really believe it’s possible for China to win back the confidence of most consumers.

    Neither do I believe just coming up with a speedy response with the truth will do the trick.

    What you may have to recognize here is we are dealing with something that is very fundamentally wrong with the manufacturing and regulatory culture in China.

    They simply don’t have a coherent philosophy to guide them when it comes to world class manufacturing.

    Regards

    Y2K (Director General of the FILB)

  3. posted on Oct 30, 2008 at 3:30 PM

    Hello, personally I think China will find a way to improve the system, in her own pace, in her own way. Every country is very unique and it is hard to apply other countries’ standard or way of life and take it wholesale and apply.

    By the way, to my family in HK, they always don’t trust Made in China product 100%. Human hairs used for the making of soy sauce is old news. Anything can happen to “Make in China” product. Just need to be mindful I guess and stick with reputed brands.

    Interestingly, no one really stands up and protests that China imposes death sentence to those they claim responsible for the episode.

    Another thought is that the Western media always blow the news out of proportion.

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