A Chinese television show publicly backlashed Nike, accusing the company of misleading its customers into buying second-rate shoes. The scandal could not come at a worse time as Nike is currently in dire need of expanding on the Chinese market.
The Story Was Followed by an Immediate Response from both Nike and the Chinese Government
Broadcasted annually, the “name-and-shame” television show is famous for pointing out economic and marketing abuse. During their latest episode, the producers invited a displeased customer that bought a pair of Hyperdunk 2008 FTBs, which were marketed as featuring Zoom Air sole cushions. When the individual in question contacted Nike to complain about the absence of the sole cushions, the company didn’t offer a proper compensation, sparking the rage of Chinese consumers.
After the story broke loose, the Oregon-based company immediately released a public statement claiming that it was aware of the problem and all affected customers had been contacted and offered some form of compensation. According to Nike, a shipment of 300 pairs of Hyperdunk 2008 FTBs were sent to China in April 2016. The shoes were inaccurately marketed as having Zoom Air sole cushions.
As soon as the program ended, authorities started questioning all staff members present at Nike’s Shanghai office. Moreover, the government began an official investigation, false advertising not being tolerated in the country.
“Nike is committed to providing consumers with the highest product quality and service, and we will fully cooperate with the government regulators regarding their inquiries,” a company representative declared.
The Scandal Comes at a Bad Time for the Shoe Manufacturer
Nike is currently struggling to reach its $50 billion revenue plan by 2020, but the fierce competition on the American market is making it harder than initially predicted. Thus, the shoe manufacturer decided to extend on the Chinese market where its sales have been roaring during the past months, raising with 17 percent in the last quarter alone.
Unfortunately for the Oregon-based shoe manufacturer, this is not the first time Nike angers its Chinese customers. Five years ago, the company had to pay a $704,000 fine for claiming its shoes had double air cushions instead of single ones.
Brian Yarbrough, lead analyst at Edward Jones, declared that a single report might not harm the company’s overall success. However, if other Chinese media outlets decide to run the story, the scandal could gain a life of its own, considerably damaging sales.
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