Every year in March, China broadcasts a two-hour long event called the 315 Gala, which is the one show no business wants to be on. The 315 Gala, also referred to as the consumer’s gala, is a program designed to expose companies that are being unfair, unethical, or breaking the laws. To get an idea of what will land you a spot on the show, read about the past companies who sat in the hot seat, such as Apple, Volkswagen, and Starbucks.
Foreign Companies in the 315 Gala
In previous years, some foreign companies in China received criticism through their consumer gala. This year, however, no well-known foreign companies were put on hot coals. Local Chinese companies in the e-retail and food industries received the criticism during the gala. Why were foreign companies safe this year? According to Chinese government sources, the reason was diplomatic policies. Another predominant reason is the government changed their focus from manufacturing firms to the service industry where there are more China-born businesses.
Don’t slack or let down your guard, however. China still enforces the law for all businesses. If you’re found breaking a rule, you’ll be in trouble just like anyone else. It’s also possible that a foreign company could make it on next year’s 315 Gala if they become complacent over this year’s consumer gala.
An Example of a Company Singled Out on 315 Gala
Alibaba’s online marketplace, Taobao, was in trouble for inflation of customer reviews by vendors and fake goods being sold on their platform. They thanked CCTV for bringing it to their attention and vowed to create a team of 300 employees whom will monitor the platform for legitimacy. It’s a good thing that businesses are allowed to correct the problem in such situations by improving their supervision.
This Year’s Top Three Industries with Consumer Complaints
China Central Television, the producer of 315 Gala, revealed the top three industries that received consumer complaints over the past year. The top three consumer complaints were about e-commerce websites, car sales, and mobile phones. The main concerns with e-commerce websites in China were the selling of counterfeit goods and the cheating of consumers.
In the automobile industry, many dealers were caught demanding that customers pay for insurance and license plates. There were also product recalls for some of the cars. The mobile phone industry had quality problems just like the other two industries, but another big complaint was poor after-sales service.
Conclusion
If you’re interested in expanding to China, then you must know what the 315 Gala is. You should be prepared around March to respond efficiently in case your business is singled out on the show. As you can tell from what happened to Alibaba, even if something isn’t directly your fault, you can be named on the show. You need to be prepared to take action. At the same time, you shouldn’t be overly anxious about the 315 Gala either. Starbucks was initially in trouble for charging Chinese consumers more than in western countries, but they are currently successful and loved in China.
We can help you mitigate risk and stay in compliance as you expand your business to China. Contact us for more information on our mitigation and compliance services.
If you are interested in knowing more about China, download the first free chapters of my book here.
