China Recalls Hurt Christmas Sales
Shoppers Reject Chinese Goods & Products
The year-long recall scare has had a great impact on consumer mentality - China has seen its credibility diminished. Customer action may stifle Christmas sales in the US.
Product Recalls
Some remember the Chinese recall problem of April 2007 – the pet food scare. Hundreds of animals were killed or injured by the time the crisis made the headlines. Tires in May, seafood and shrimp in June still had little impact on the American consumer. In July the antifreeze laced toothpaste and counterfeit fire causing electrical circuit breakers from China were all over the media. It appeared the Chinese were gaining control of the problem with the announcement that Zheng Xiaoyu, the head of China's Food and Drug Administration, was executed for corruption.
Then came the August 3rd release by El Segundo, California toy maker Mattel that 83 types of toys from its Fisher-Price unit contained “…excessive levels of lead paint.” Suddenly the Chinese recall scare received momentous attention from all members of society. Overnight nine million toys became the central focus of parents around the free world. Lead-filled toy rakes and acid-laced little girls' bracelets; collapsing baby chairs and flammable infant clothes were weekly headlines for the next several months. In August 11.5 million items from China were recalled, in September the number fell to 4.7 million but grew to 8.1 million in October. October alone had 37 different children’s products, that were made in China (6,184,850 individual items,) recalled (full list here.)
Government Response
When the governments of Australia, Canada and the USA announced in November that 1.5 million additional toys would be recalled because they contained the chemicals GHB & Rohypnol flunitrazepam (found in “date rape” drugs), parents and buyers around the world began to challenge where items were being made. China’s retort about quality control assurances fell on deaf ears. “…I suggest all parents choose Chinese toys as Christmas gifts to their children,” China’s head of the national quality, Li Changjiang, said in a news conference on December 12th.
Advertising
Advertiser and retailers see product safety and the “Not Made in China” brand as a marketing tool. Companies like Lana Natural stuffed toys from Germany and Lithuania labeled their products as “China Free.” Nest products of the USA saw their orders “triple in November.” Websites China Free Christmas and Not China Made claim they have thousands of weekly hits.
Consumer’s Problem
Still consumers will find it difficult to locate items where China does not have some manufacturing part. According to an October Harris Interactive Poll, “33% of Americans said they will purchase fewer toys, while 45% will avoid buying toys manufactured in China.” This number increased to 75% in a November 30th Poll reported by Reuters. “…3 out of 4 people say they won't buy Chinese-made toys this holiday season.”
As stated by Rod Walton, staff writer for the Tulsa World Newspaper: “All of this brings me back to Chinese toys and holiday mania. If Americans decide to pay more for domestic toys or not buy anything made in China, it would be a significant blow to that giant, growing economy.” Unfortunately for consumers, 80% of toys sold in the U.S. are manufactured in China. No. 1 retailer Wal-Mart Stores cited toys as a weak product segment so far this season and Toys-R-Us has designated a China-free section in its stores to boost Christmas sales. Yet, one fact remains: the China effect on Christmas will be large.
