Corporate greed is nothing new. We watch movies about it. Multinational corporations, iniquitous and avaricious, pull strings and jawbone governments in efforts to dominate and expand. It's sinister, and it's the kind of evil we understand. Of course, the bulk of that is extravagant, imaginative fiction.
But the first sentence remains true: Corporate greed is nothing new, and everyday shining examples can be found. Last Wednesday, more than a dozen Carrefour stores in China's mainland were accused of price manipulation. Erroneous or misleading price tags, exaggerated discount advertisements and double-price labeling have resulted in overcharging for numerous products.
Carrefour has since issued apologies and offered sizable compensation – five times the difference between the advertised price and actual charge – to make amends for customers fooled by ambivalent price tags. Walmart, also accused of price frauds, has issued no apology but has pledged to increase supervision before the lunar New Year Festival.
Carrefour is massive, the largest retail outlet in France, and though occasionally there are minor problems, one would be hard-pressed to find similar issues occurring in France. Why then does it happen in China? Some will think back to the first paragraph and point fingers at the Carrefour entity. Again, let's not allow our imaginations to go unleashed. Carrefour is a major foreign retailer, with international standing and a large market share in China. The problem has been identified only in a dozen outlets in China. The more likely explanation lies in local causality: outlets individually manipulating prices to increase profits.
The key to solving the problem? There are two. The first lies in increased supervision, both on the retailer's part as well as local authorities enforcing standards. The second lies in competition. With domestic retailers progressively grabbing market shares from their foreign rivals who had been safely ensconced in China for years, norms and ethics will have to be adhered to.
Therein lies the greatest threat for Carrefour, Walmart and the others: For years they were given preferential treatment when competition was nonexistent, allowing them to apply double-standards in China. Low wages, few salary increases, entrance fees for domestic suppliers – all these boons paved the way for growth and development. These foreign brands will have to learn to let go of these boons if they want to play fair, now that rivals are emerging to challenge them.
The author is a French-American, currently living and working in Beijing.
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn