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NIKE's "Zoom Air" Crisis in China

Time£º2017/03/17 20:59:57 View£º hits

China Central Television (CCTV)¡¯s annual consumer investigation show disclosed Nike Inc.¡¯s false advertising on March 15, 2017. Nike was advertising its #Hyperdunk 2008 FT8# product containing ¡°zoom air¡± cushions on Nike¡¯s official website, while consumers found no zoom air cushion after they bought the sneaker at a price of RMB 1499.

 

China is the second biggest market of Nike products, and the revelation of Nike¡¯s misleading consumers might impact its global marketing reputation. Nike Inc. was pushed to the cusp of public opinion after being highlighted in the show; and it admitted its misleading advertisement and said it would offer refunds to the affected consumers.

 

According to Law of the People's Republic of China on Protection of Consumer Rights and Interests, when a business operator provides a commodity or a service with a fraudulent behavior, the consumer could ask for a compensation for losses, and also a punitive damage of three times of the compensated losses. At the same time, on the basis of Advertisement Law of the People¡¯s Republic of China which was passed on 2015, Nike Inc. might face a penalty up to RMB one (1) million. 

 

In China, the lack of integrity in business operation will bring severe punishment. While a multinational company is planning to enter the Chinese market, it shall obtain a novice understanding of Chinese legal system to avoid potential legal risks. 

 

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