What brands can learn from Blackmores’ false advertising fine in China

Blackmores' fine for posting medical claims on WeChat and printed advertisement in stores serves as a warning for any Australian marketers trying to push into the Chinese market. In this guest post Ophenia Liang explains what you need to know.

Blackmores’ $65,000 fine by the Shanghai Administration for Industry and Commerce (AIC) for misleading marketing material came about because the company had posted medical claims on WeChat and printed advertisement in stores.

Advertisements in China relating to health foods must not contain medical-treatment claims.

The fine was imposed on China’s Consumer Rights Day reinforcing the Chinese government’s focus on consumer protection and its clampdown on undesirable advertising activities.

The company was caught because they ignored one of the most fundamental rules when entering China’s lucrative, yet complex market. They were not fully briefed on Chinese regulation and law in terms of promoting their products or services on digital platforms such as WeChat, which integrates the features of social and advertising and has become one of the most targeted digital media platforms for Australian companies wanting access to the Chinese market.

As the Blackmores case shows, not complying with the law will lead to stiff penalties, and ultimately serious brand reputation damage.

The Chinese government has turned its attention toward greater regulation of advertising ever since the implementation of the nation’s new advertising law came into effect in 2015 as a result of China’s burgeoning online advertising sector.

This means advertising elements – including headlines, visuals, taglines, body copy shown on an online platform, such as WeChat – with the aim of promoting a product or service must be subject to the government’s laws and regulations.

There are four key areas that all Australian companies must be across in any marketing and communications campaigns in China.

First is advertising content.

The law defines specific terms regarding what can and cannot be said in business sectors such as medical, healthcare, health supplement, education, real estate, agriculture, investment and finance. Advertisements relating to health foods must not contain medical-treatment claims. This is the reason Blackmores was fined.

Second, endorsements are a normal marketing practice when Australian companies plan to enhance their brand awareness. However, Chinese regulations on endorsements, including personal experience of using an endorsed product or service, are tightened in some sectors, and are clearly prohibited in others.

It’s also important to note that the underage group can no longer serve as an endorser of a product or service.

Third, the use of technical jargon and exaggerated illustrations to fabricate or intentionally enhance the actual effect of the product or service is regarded as false advertising and may incur severe punishment.

Finally, when sending out electronic advertising, no advertisement can be sent out in the form of information without the agreement or request of the recipient in China.

If an advertisement is sent in electronic form, the sender’s true identity and contact information must be clearly indicated, and the sender must provide the recipient a method to discontinue receiving such advertisements.

The fact that Blackmores was fined on China’s Consumer Rights Day reinforces the Chinese government’s commitment to consumer protection ​by clamping​ down on undesirable advertising activities.

This means Australian brand owners must review their advertising practices in China to ensure compliance with the law and regulation because any false claims in advertising are not merely about legal liabilities or monetary compensation – under most circumstances, it brings reputation damage and causes a credibility issue with Chinese consumers.

Blackmores’ fine for posting medical claims on WeChat and printed advertisement in stores serves as a warning for any Australian company trying to push into the Chinese market, and the key lesson is to make sure you are across all Chinese regulations before you speak to consumers in China.

Ophenia Liang is the director and co-founder of Digital Crew, a multilingual digital agency based in Sydney, Hong Kong and Guangzhou specialising in cross-cultural marketing.


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