Nike was blasted by a consumer-protection show on state-run television in China, giving the Portland-based sportswear giant a bad name brand in its second-biggest market. The annual program, a “name-and-shame” show that aims to uncover abuses by companies, said Nike had falsely advertised basketball shoes. The sporting-goods giant claimed the sneakers had Zoom Air sole cushions inside when they did not, according to the broadcast.
The unwelcome publicity comes at a time when Nike needs China more than ever for growth. The company is facing heavier competition in the U.S., weighing on its plans to reach $50 billion in revenue by 2020. Sales in China, in contrast, have been soaring: Excluding currency effects, they jumped 17 percent in the most recently reported quarter.
The fallout from the name-and-shame show may depend on whether the criticism spreads, said Brian Yarbrough, an analyst for Edward Jones. “One report is probably not a lot to be concerned about,” he said. “But that could change if it becomes bigger and you see more press about it.”
Nike said Wednesday that it learned in April of last year that 300 pairs of its Hyperdunk 2008 FTB were sold in China that inaccurately stated the shoe contained airbags. The consumers were contacted and offered compensation and an apology, the company said.
“Nike is committed to providing consumers with the highest product quality and service, and we will fully cooperate with the government regulators regarding their inquiries,” Nike said in a statement.
Previous shows targeted homegrown powers like e-commerce giant Alibaba and China Mobile Ltd. Alibaba has struggled to keep counterfeit products off its websites, while China Mobile, the country’s largest wireless carrier, was targeted in 2015 for enabling fraudsters who impersonated banks and the police to obtain money.