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Apple and Volkswagen Slammed on China Consumer Protection TV Show


China Mobile and Yum Brands also make the news.

China Watch: Top Business News From the World's Second Largest Economy

Each year, the state-run China Central Television (CCTV) network airs a program that exposes corporate malpractice.

This year, the targets of the exposé were Apple (NASDAQ:AAPL) and Volkswagen (PINK:VLKAY). According to the state broadcaster, Apple provided poorer after-sales service to customers in China compared with customers in other markets.

Volkswagen was slammed for issues with its direct shift gearbox transmission, which caused drivers to experience loss of power and sudden acceleration.

Apple's flagship store in Shanghai An Apple store in Shanghai. Source: Mac Einstein
According to Reuters, Volkswagen acknowledged the complaint with a statement on its official Chinese Weibo microblog, saying, "We take this report very seriously and we will quickly make contact with our consumers to resolve the issue."

The CCTV corporate exposé program was broadcast on Consumer Rights Day. To create goodwill on the occasion, numerous brands kicked off promotions to appeal to customers. For example, McDonald's (NYSE:MCD) said it would give out free breakfasts on Monday, while Wal-Mart (NYSE:WMT) planned an "adopt-a-tree" initiative.

Samsung (PINK:SSNLF)

As the Korean electronics giant celebrates the launch of its flagship Galaxy S4, it also has good news from China to report: For 2012, the Android (NASDAQ:GOOG)-powered Samsung tripled smartphone sales to a robust 30.06 million (17.7% market share), toppling Nokia (NYSE:NOK), which tumbled from first place to seventh place (3.7%)

Lenovo (PINK:LNVGY) (13.2% share) was second while Apple came in third (11%), according to Korean news agency, Yonhap.

"Last year, we registered the best-ever performance as the world's largest consumer electronics maker, and China is becoming one of the most important markets for Samsung," said Park Jae-chun, chief executive officer of Samsung Greater China, reported Xinhua.

Park added that Samsung also led the way in the mobile, display, and flat-panel TV sectors in China in 2012.

China Mobile (NYSE:CHL)

China Mobile confirmed its commitment to fourth-generation wireless technology, announcing this week that it will spend close to $7 billion this year to build its 4G TD-LTE network.

The announcement is good news for Apple, whose iPhone could not be offered by China Mobile previously because of network incompatibility.

"If you're Ericsson (NASDAQ:ERIC), Huawei (SHE:002502), Softbank (PINK:SFTBF) or Apple, it's sending a clear statement that they believe this technology will work and they're putting their money where their mouth is," said HSBC telecom analyst Tucker Grinnan, according to the Wall Street Journal.

China Mobile plans to spend an impressive $30 billion on capital expenditures this year, which is a 50% jump from 2012.

The wireless carrier is the world's largest, with some 715 million subscribers. When China Mobile finally lands the iPhone, it will represent a significant growth opportunity for Apple.

Yum Brands (NYSE:YUM)

Yum Brands reported that sales at its restaurants in China dropped by some 20% in the first two months of 2013. While steep, the fall is less precipitous than what the company had feared in light of the KFC food scare late last year.

Sales at its KFC stores fell 24%, while sales at Pizza Hut restaurants dipped 2%.

Earlier this year, Yum said that its projected 2013 earnings per share would take a hit thanks to poor results in China. Still, the company plans to open 700 new restaurants this year in the mainland. It now has over 4,200 KFC outlets and some 800 Pizza Huts.


Sina's Weibo, China's microblogging equivalent of Twitter, reportedly had 503 million registered users at the end of 2012. But according to a study by researchers at Hong Kong University, close to half of them never posted anything on Weibo.

According to the Wall Street Journal, the study examined a random sample of some 30,000 Weibo accounts and learnt that 57% of those never ever made a single post, which means they could either be passive users or a spam account.

And of the 12,000 accounts that posted updates, the researchers found that over a seven-day stretch, 86.9% of users did not post anything original at all. In other words, Weibo is similar to Twitter in that only a tiny percentage of users are active and vocal users.

Like all social media companies, Sina is aggressively trying to improve the monetization of Weibo. Last year, Sina posted a $302 million loss.

Twitter: @sterlingwong

Also see:

Can the Samsung Galaxy S4 Break the BlackBerry-Apple Stranglehold on Business Customers?

Why Apple Surged in the Smartphone Market in India
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