China consumer show targets camera maker Nikon in annual ritual

SHANGHAI Sat Mar 15, 2014 10:47pm EDT

A sign hangs in the Nikon booth on the first day of the Consumer Electronics Show (CES) in Las Vegas January 8, 2013. REUTERS/Rick Wilking

A sign hangs in the Nikon booth on the first day of the Consumer Electronics Show (CES) in Las Vegas January 8, 2013.

Credit: Reuters/Rick Wilking

SHANGHAI (Reuters) - Japan's Nikon Corp has moved to allay consumer fears in China after being criticized on a closely watched consumer show that said the camera maker had sold defective products in China and denied local consumers fair treatment in aftersales service.

The firm, which had sales of 118 billion yen ($1.16 billion) in China in 2013, said on Sunday it was taking the report "very seriously" and had moved to improve its after-sales network in China, according to its official microblog sites.

Criticism in Chinese state media can have a long-lasting impact, particularly in cases of corruption and food safety scandals, which have hit some firms over the last year, including French foodmaker Danone SA to British drugmaker GlaxoSmithKline Plc.

An annual investigative special on China Central Television (CCTV) called "3.15", similar to the CBS network's "60 Minutes" in the United States, said late on Saturday that some of Nikon's D600 cameras had black specks on the lens, and accused the firm of refusing requests to replace the defective products.

The show suggested that Nikon consumers in the United States receive better treatment, echoing the attack in last year's show on smartphone maker Apple Inc's China warranties, which prompted a rare apology from the giant U.S. tech firm.

"From today, based around an attitude of responsibility towards our users, Nikon will continue to offer our customers in the China market a high-quality, standardized global service," Nikon said in Chinese on the country's Twitter-like Weibo.

The "3.15" expose often spooks multinational firms and their public relations teams into crisis mode, but this year left other big international firms relatively unscathed, choosing to focus on smaller, domestic players.

A short segment warned consumers about the dangers of online payments, coming after China's central bank halted the mobile payment processes of IPO-bound Alibaba Group Holdings and Tencent Holdings Ltd.

CCTV WOUNDED

Last year "3.15", one of the most widely watched shows in China, singled out Apple for its after sales service and German carmaker Volkswagen AG over gearbox issues.

Fast-food outlet McDonald's Corp, supermarket chain Carrefour SA and home products firm Procter & Gamble Co have also previously come under the show's spotlight.

But CCTV has come under fire in China over the last year, with some consumers rushing to defend its targets. Younger generations are also turning away from traditional CCTV shows, attracted to imported dramas online.

Shoppers, economists and even internal CCTV staff criticized a TV report in October targeting high prices at U.S. coffee chain Starbucks Corp.

Firms have also got wise. Nikon itself has launched a "3.15" campaign, while German carmaker BMW said on Friday it would recall an unspecified number of vehicles proactively in China after months of consumer complaints.

"We have learned a lot from the last experience," said a spokeswoman from Volkswagen, which was caught in the spotlight last year.

State TV exposes like "3.15", however, remain dangerous for firms in China, and marketing experts said that without damage control the impact could be significant.

KFC parent Yum Brands Inc has struggled to quell anger over Chinese media reports in late 2012 about excessive antibiotic use by a few KFC suppliers in China.

"How companies first respond to a crisis will determine its severity and longevity in consumers' minds," Colleen Cheng, co-managing director of Ogilvy PR Beijing said, ahead of the show. ($1=101.4650 Japanese yen)

(Reporting by Adam Jourdan; Editing by Clarence Fernandez)

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