Foreign brands should abide by Chinese laws while operating in China

Xiji (Shanghai) Trading Co., a Canada Goose-affiliated company in China was recently fined 450,000 yuan ($69,750) by the market regulator in Shanghai, for falsely advertising goods or services. This sounded an alarm for foreign enterprises operating in China that they should abide by Chinese laws and never cheat consumers.

After the trading company opened an official flagship store for Canada Goose on Tmall in September 2018, it quickly reaped the favor of Chinese consumers as it advertised that its down coats displayed the best quality. However, the company came into the spotlight after a Shanghai market regulator announced an investigation in which they found that among all the types of down clothing that the company sold, nearly 70 percent comprise jackets made with ordinary duck down, which was inconsistent with the advertisements claiming that all of its down coats contained “Hutterite” down feathers. Hutterite down comes from duck and geese feathers collected from Hutterite communities in northern Canada.

China’s advertising law clearly stipulates that an advertising shall not cheat or mislead consumers through the use of false or misleading content. This is a bottom line for all enterprises to stick to and it must not be crossed. In this regard, the Canadian company deserves the punishment.

An honest business will choose to go further and do better, and win the trust of consumers. Canada Goose is a luxury down clothing brand with the prices for its down jackets becoming higher and higher year-by-year. Though most consumers might not know what “Hutterite” means, they are still willing to buy the products under the influence of the advertisements.

In 2020, the webpage for Canada Goose’s Tmall flagship store was viewed 181 million times, and the sales volume reached 167 million yuan, which partly reflected the recognition and love for the brand among Chinese consumers. This time, however, the brand has betrayed consumer trust. It is a rule that those who fool consumers are doomed to lose the market, and those who hurt consumer feelings will sooner or later regret their behaviors.

The tricks of the trading company, including emphasizing the origin of “Hutterite” produced feathers to highlight the warmth of the down, and adopting a narrative, which seems professional to innocent consumers, to advertise their products, along with the application of superlative language, are all banned under China’s advertising law. They might have fooled some consumers, but they eventually were seen through by the market regulator, leading to the company being punished by the law.

All enterprises, Chinese or foreign-invested, must abide by the country’s laws and be honest to Chinese consumers. In addition, consumers must understand that foreign brands do not always stand for high quality, and foreign down jackets are not necessarily warmer than Chinese brands. While shopping, consumers should stay rational so that there is no place in the market for dishonest brands.