Chinese Consumers Know How to Avoid Tainted Goods

P.T. Black From Shanghai

By Published on .

What's that noise? It's the howling in unison of American children as their parents take their made-in-China toys away. From the far side of the Pacific however, it all looks a bit different.

For Chinese consumers, quality fears are a familiar problem. One in five of our youth panelists choose the phrase "bad quality" to describe things made in China. The biggest panic here has not been about branded toys, however. Instead China has been most worried about the health of its pigs, whose blue-ear disease has led to a massive spike in market price. This is no joke in a country whose pictograph for "home" sketches a pig under a roof. Wealthier urbanites are so concerned that they pay a premium to buy in-house organic groceries.
P.T. Black
P.T. Black is a partner in Jigsaw International, a Shanghai boutique lifestle-research agency that looks at the direction of change in China.

But with the exception of food staples, there is a lot less fear in China about product safety. One reason is faith in robust consumer-protection legislation that delivers a minimum of product safety.

These standards, however, only cover above-board products. The structure of markets explains more. Shopping in China is controlled chaos. Buying a toy could involve a high-end shopping mall, a Wal-Mart, a branded local store, an unbranded local store, an informal night market or many other combinations.

Navigating the options takes savvy, and there is an unspoken understanding that as you move down the price chain you expose yourself to more risk. Overseas products and retailers generally fall higher on the price/quality consideration scale.

Consequently, consumers feel empowered about their options. Known channels sell reliable branded goods at a higher price. The street has dirt-cheap options with no safety guarantee. The challenge is to find your own balance -- support those shops with authentic products at reasonable prices, avoid shops that sell fake products and have high prices. That's why overseas airports are full of Chinese men buying premium Chinese domestic cigarettes -- only in the supersecure overseas airport channel can they be sure their domestic cigarettes are authentic.

So Chinese aren't panicking, because they expect a complex world. They have faith in oversight of official goods and have overseas options as backup. They balance the costs and risks of the gray market. The difference, of course, is that they expect to find that market at a Wal-Mart.
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