Nike Faces Criticism on China’s Consumer Day Show For False Advertising – March 15, 2017


Nike Inc. (NKE Free Report) fell on Wednesday morning as China’s state-run television, China Central Television (CCTV), criticized the sportswear company for alleged false advertisement.

The CCTV show shined the light on a shopper who bought Nike shoes sold in China that didn’t include the advertised cushions, “Zoom Air.” A broadcaster showed Nike in violation of China’s consumer protection law for not properly compensating the consumer.

The CCTV show “315” is a reference to World Consumer Rights Day on March 15. The show is similar to “60 Minutes” from CBS.

The annual TV program which looks to expose companies’ wrongdoing with hidden cameras and undercover reporters had targeted some of world’s largest corporations in the past, including Apple Inc. (AAPL Free Report) , McDonald’s Corp. (MCD Free Report) and Volkswagen AG (VLKAY Free Report) .

Beside Nike, Japanese retail chain Muji was also featured on the show for selling products that were mislabeled along with fake eye doctors on scamming patients, animal breeders for speeding up animals’ growth with medicines and China’s version of Wikipedia,, Reuter reported.

Shares of Nike rose on Tuesday after an upbeat upgrade from Morgan Stanley’s analyst for next quarter’s earnings report. (For more information on Nike, check out this Zacks article: U.S. Sports Apparel War: Nike Vs. Under Armour)

“Pretty much all the big corporations have their PR machines ready to jump into action because they’ve seen what happens when companies are not prepared,” said James Feldkamp, Shanghai-based CEO of independent China consumer watchdog Mingjian, to Reuters.

The company’s reputation and sales can be damaged when featured on the annual show. However, the impact is typically short-lived. People tend to forget about it after a little while.

Nike bounced back in early afternoon trading, rising a slight 0.47% to $57.55 per share.

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