Irony: Chinese Officials Attack Quality of Foreign Luxury Goods

[jkerouac]

When I read this Wall Street Journal article I had to ask myself, "Perhaps the Chinese government could step in to improve the quality of our reps?"

By SKY CANAVES

BEIJING—An attack by Chinese provincial officials on foreign luxury brands, including Hermès, Hugo Boss and Tommy Hilfiger underscored the vulnerability of the luxury brands in one of their most important markets.

Authorities in wealthy Zhejiang province, on the east coast near Shanghai, marked consumer's day on Monday by taking aim at the quality of imported designer fashions.

In a statement posted on its Web site, the Zhejiang Administration of Industry and Commerce said that "International designer clothes, blindly worshipped by Chinese consumers and enjoying 'super national treatment' in the country, have once again proven unsuitable for China."

The targeting of foreign designer brands for defective products is the latest wrinkle for foreign businesses in China. It comes as Google Inc. is preparing to shutter its Chinese language search business and as Hewlett-Packard Co. came under scrutiny from Beijing for problems in some of its laptops sold in China.

According to the Zhejiang notice, 48 out of 85 samples of imported clothing from 30 international brands failed to meet Chinese product quality standards. The brands also included Versace, Dolce & Gabbana and Zara.

The authorities say that they have impounded all of the clothes with the same model numbers as the samples that failed to meet the standards, but the rest of the companies' products aren't affected. It was unclear if any fines would be levied.

The harsh tone of the attack appeared to be out of proportion to the actual infractions: half of the complaints were over usage labels, including laundry instructions that failed to meet Chinese requirements. Nevertheless, the statement was carried widely by China's official media.

While the immediate financial impact of the sanctions against the luxury brands is likely to be limited, the negative publicity could be damaging. Foreign brands sell at a huge premium to local brands, justified in part by the perception of quality.

The China market has taken on greater importance to the makers of luxury goods in recent years as sales in other major markets have declined. In an October forecast, consulting firm Bain & Co. said it expected luxury-goods sales in mainland China to increase by 12% last year, to

[HauteHippie]

Well it's an integral part of the economy now... Whereas 30 years ago, imported products were synonymous with high quality and high prices, the business environment has changed so dramatically here at home since then that imported products are now synonymous with high quality (for the most part) and low prices while the cost of producing mostly anything domestically that competes in quality is sky high.

And, hey, it's hard to complain about the price to quality ratio of our reps... Just imagine the price tag of these same reps if produced in, say, New Jersey.

[gran]

Well it's an integral part of the economy now... Whereas 30 years ago, imported products were synonymous with high quality and high prices, the business environment has changed so dramatically here at home since then that imported products are now synonymous with high quality (for the most part) and low prices while the cost of producing mostly anything domestically that competes in quality is sky high.

And, hey, it's hard to complain about the price to quality ratio of our reps... Just imagine the price tag of these same reps if produced in, say, New Jersey.

whats wrong with New Jersey?

[maxman]

Whats the matter with NJ? are you crazy? want to get wacked Gumba? Bada Bing Bada Boom

[HauteHippie]

whats wrong with New Jersey?

It has among the least business-friendly climates in the country.

[Jkay]

I thought you were being clever .. aren't Invictas squeezed out in NJ ??

[gran]

It has among the least business-friendly climates in the country.

once lived on Staten Island...we always had the idea that NJ was backwards and for the poor..how wrong we were

[HauteHippie]

I thought you were being clever .. aren't Invictas squeezed out in NJ ??

Heh. I don't know... Funny though!

[offshore]

Whats the matter with NJ? are you crazy? want to get wacked Gumba? Bada Bing Bada Boom

Do you think things are that much different in say downtown Guangzhou?

Just don't know the Chinese wording for "whacked" or "sleeping with the fishes"

O/S

[Iron Mike]

....self preservation.

"One of the weakest aspects of China's economic development has been its failure to build its own brands. With a few exceptions, such as Tsingtao beer and Haier white goods, Chinese brands are virtually unknown in Western markets. The fact that foreign brands dominate the China market rankles with central government economic planners, and could embolden local officials to take this kind of action, analysts say."

Can't live forever copying other peoples stuff I suppose.

[HauteHippie]

"One of the weakest aspects of China's economic development has been its failure to build its own brands. With a few exceptions, such as Tsingtao beer and Haier white goods, Chinese brands are virtually unknown in Western markets. The fact that foreign brands dominate the China market rankles with central government economic planners, and could embolden local officials to take this kind of action, analysts say."

Yea, I couldn't disagree more with that assertion. Why does China need exportable brand names when they produce nearly everything used in virtually every recognizable foreign brand (certain luxury items excluded of course) anyhow? The economics are simple. China is the world's single leading exporter; a title that once belonged to the USA. And the plethora of recognizable USA brand names haven't done much to help abate our decline. If only the USA's economic resurgence could be as "weak" as China's development...

[Jkay]

Haier was going under ... Chinese people weren't interested in State manufactured appliances. One day, an engineer at Haier was thinking about some news he'd heard. That men were annoyed that women got to use household appliances to lessen their workload. The Chinese men often tried to use the women's appliances to lessen their own workload but when you fill a clothes washing machine full of dirty potatoes, they would always break down from the load.

The Haier engineer got approval from him Government bosses to design and prototype a clothes washing machine which was durable enough to load with vegetables and wash the clods of earth and dung from them.

Once Haier perfected these new machines, they sold wildly since the chinese men had reason to want them beyond their wife wanting one.

This idea saved Haier from obscurity and allowed them to eventually begin marketing their appliances world wide.