2014-12-11

Why Do Foreign Companies Break Bad in China?

Foreign companies have a bad track record in China. Many foreign brands are popular because Chinese consumers associate them with higher quality. Yet all manner of foreign companies tarnished their brand names by adhering to local quality standards. This is acute in the food industry, where firms such as KFC have been hit several times and even Starbucks ran into trouble for an ingredient in its cakes. Usually the issue isn't serious, but the damage to the brand is not worth "going local" to save money.

Now even Wal-Mart has "gone local" in a bad way.

From ZeroHedge:How Wal-Mart Fabricated And Lied About Its "Strong" Chinese Sales For Years
“There is a general flexibility on ethics” in China, Lin said in an interview. “There was a huge desire to perform. In this market, they believe if they’re hitting the numbers, then they’re doing the right thing.”
As ZH asks, do you think Wal-Mart is the only company fabricating results?

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