China targets Canada Goose, manufacturer of chic parkas | Voice of America
WASHINGTON – Canada Goose, the Canadian maker of parkas it says are designed to keep wearers warm in “the coldest places on earth,” is the latest foreign brand targeted by Chinese regulators.
The state-controlled CCTV revealed that authorities fined the Shanghai-based affiliate of about $ 70,000 (450,000 RMB) for “misleading advertising of goods or services, deceiving and misleading misleading consumers ”.
The Shanghai Huangpu District Market Monitoring and Administration Department took action against the local outlet of Canada Goose Holdings Inc. in Toronto in June, a ruling released by CCTV on September 2.
The National Enterprise Credit Information Publicity System (Shanghai) reported that regulators in the Shanghai district discovered that Canada Goose, which markets its products as filled with goose down, mainly uses duck to stuff its clothes.
Regulators said the company announced it was using “Hutterite down,” saying it was the warmest down available. The Hutterites, a religious group in Canada similar to the Amish and Mennonites in the United States, has a reputation for raising high quality geese and ducks.
And while Canada Goose’s marketing emphasizes the warming quality of the down it uses, Shanghai regulators said the place of origin has nothing to do with the warmth of the down.
On September 8, other Chinese state-affiliated media began criticizing the expensive parkas which, like The New Yorker suggested, broadcast, “I made the money, then I spent the money. And now here I am, hotter than you.”
Economic Daily posted a comment titled Catch lying down Canada geese on September 8, suggesting that Canada Goose had violated Chinese law regarding advertising standards. He continued to accuse the company of do not credit Chinese buyers as informed consumers and able to conduct market research.
Calling on Chinese consumers to buy Chinese brand products, the Daily economic urged Chinese companies to seize the opportunity to increase their market share.
The newspaper also reported that Xiji (Shanghai) Trading Co., operator of the official Canada Goose flagship store on Chinese online retailer Tmall, achieved sales of $ 25.9 million (167 million yuan) in 2020. On the company’s US website, the most expensive Canada Goose parka, the Polar Bear International, costs $ 1,545. The same coat on the company’s Chinese website costs $ 1,616 (10,400 yuan).
Canada Goose said in Canada Radio-Canada Newson September 8, a technical error on a partner website caused confusion about the down.
“Earlier this year, a misalignment of text was found on a partner site, Small, in our region (Asia-Pacific). The error was corrected immediately, “reads the email sent to CBC.
The company told CBC it uses both goose down and duck down, depending on the garment. Although Canada Goose is best known for its parkas, it makes other down and non-down products.
VOA Mandarin has contacted Canada Goose but has not received a response.
Canada Goose is not the only company targeted by Chinese regulators. Earlier this month, Chinese regulators fined H&M, the Swedish multinational retailer, $ 51,000, saying the company falsely claimed that some of its products were sold exclusively in China.
It came after Chinese netizens attacked H&M in April for a statement expressing concern over allegations of Uyghur forced labor in cotton production in Xinjiang, a stronghold of the Muslim minority.
Major e-commerce websites have phased out H&M products, and dozens of Chinese celebrities have terminated their sponsorship contracts with the company. Brands such as Nike and Adidas, which had expressed similar concerns over the situation in Xinjiang, saw their sales plummet in China.
Experts say the rise in nationalist sentiment in China since the advent of the COVID-19 pandemic, coupled with Beijing’s official policy of supporting national brands, could lead to consumer nationalism.
According to its official website, Canada Goose currently has 21 stores in China, making it one of the fastest growing brands in the Chinese market. The company has nine stores in Canada.
“The campaign fits into the themes of ‘equality’ recently highlighted by President Xi. Foreign brands are something like private schools – attended by high-income Chinese households,” said Gary Hufbauer, an economist at the Peterson Institute for International Economics, to VOA in an email. “National brands are considered the preference of ordinary people.”
Analysts believe that as tensions increase between China and the West, Chinese nationalists equate buying Western brands with endorsing Western values. To refuse foreign brands is to resist foreign influence, according to the nationalists.
Amid the push by nationalists, Beijing is actively promoting national brands and promoting patriotism in the purchasing decisions of Chinese consumers.
In July, Chinese sports brand Erke rose to fame overnight after donating around $ 7.6 million (RMB 50 million) to flood-stricken central Henan Province. Chinese netizens announced the move, and Erke saw his biggest single-day sales jump.
“Foreign companies face a less receptive environment in China,” Hufbauer added. “Official statements are often hostile to the United States, so buying foreign brands, especially American brands, seems unpatriotic to ordinary Chinese.”
Caught in the middle
Canada Goose entered the Chinese market in 2018 when relations between Ottawa and Beijing began to crumble. Canada arrested Meng Wanzhou, Huawei’s chief financial officer in connection with a US extradition request for fraud in December 2018, and China subsequently detained two Canadians – Michael Kovrig and Michael Spavor – on charges of espionage. Spavor was sentenced to 11 years in prison last month.
The Chinese Consulate General in Montreal said on September 11 that Canada Goose’s current action is only related to market regulation and challenged any “political interpretation of the case”.
Wang Qing, professor of marketing and innovation at Warwick Business School in London, told VOA by email that the Chinese government has been emphasizing the importance of building strong Chinese brands for several years. “We have seen a real improvement in national brands in terms of quality and branding,” she said.
Still, she argued that currently, the competitive advantage between Chinese and Western brands is different.
“In the short term, there is no real threat to high-end foreign brands, because most Chinese brands are good value for money. They do not compete directly with foreign brands, ”she added.
Reuters provided additional reports.