'Truly made in Italy'

The fire department in Hangzhou, capital of Zhejiang province, closed the Da Vinci store on Thursday, citing fire safety violations. Li Zhong / Xinhua

At a news conference in Beijing on Wednesday, Da Vinci general manager Panzhuang Xiuhua insisted that all the Italian furniture displayed in her eight outlets "was truly made in Italy".

Panzhuang, who burst into tears several times, said she was willing to buy 20 tickets for journalists and customers to travel to Italy for a field study of her Italian suppliers.

She did say the "American furniture" pieces in her stores, including the Hollywood Homes brand, mostly were outsourced products made in countries including Vietnam, the Philippines, India, Indonesia and China. She said the sales staff had told buyers about the places of origin.

Panzhuang also said that Changfeng makes furniture for Hollywood Homes.

Tino Cappelleti, who was introduced as CEO of Cappelleti, said his company's furniture is "100 percent made in Italy" and all its material meets the European Union's quality standards.

The news conference was interrupted twice by an unidentified customer who yelled that he worried about the quality of Da Vinci's furniture. He said he had bought some costing more than 10 million yuan. The company did not respond to his comments, and he left.

"I am considering returning all furniture and asking for compensation from Da Vinci," a customer named Ding told China Daily after the conference. He said he had spent nearly 3 million yuan at the store.

Warehouse raid

Shanghai Administration for Industry and Commerce sent a 70-member team to investigate Da Vinci's products in Shanghai on Sunday night after the broadcast. In one of the company's warehouses in Qingpu district, the team found some furniture that investigators think had false place-of-origin labels.

"We will take the suspected products back for examination and further investigate the company's sales," Zheng Hong, deputy head of the administration's fair trade division, said on Sunday.

The administration would not provide more information when China Daily telephoned Tuesday afternoon, saying it will take some time to complete the investigation.

Meanwhile, investigators returned to the warehouse on Monday and found 233 pieces of furniture labeled Cappelletti. Some did not appear to meet national quality standards, CCTV reported on Tuesday. On Wednesday, CCTV said the entry-exit inspection and quality bureaus of Shanghai and Shenzhen will review Da Vinci's import and export records for the past two years.

The foreign cachet

Why do some Chinese companies fabricate a foreign identity or business relationship? The answer involves quality images, both negative and positive.

Tencent, one of China's largest Internet service portals, launched a survey on the Da Vinci case on Monday. By Thursday morning, nearly 92,000 responses had been filed, 95 percent of them saying the company should be investigated.

To a question about the quality of made-in-China products, 61 percent of responses noted that there are both good and bad, but nearly 36 percent said there are more bad products.

What's the difference between imported and domestic goods? "Foreign products are good in quality and fashion in design," said Xu Qian, 29, a software designer in Beijing.

Liu Guang, who opened an online shoe store in June on retail platform Taobao, told China Daily on Tuesday that it's common for online stores in China to have French or French-sounding names for selling wine, Italian names for selling clothes and English names for electronics. "A foreign name . . . adds some exotic flavor to your products."

"Similar cases are common in the clothing industry of China," said Wang Fengchang, CEO of the legal website Laweach and a Beijing-based expert in consumer rights. He mentioned Nike and Adidas as an example.

"The two are famous foreign sports brands. In order to save on costs, they built many factories worldwide, including China," he said, "but they clearly marked the place of origin on every product, which is legal."

Wang also said Nike and Adidas products, even those made in China, cost twice as much as the same products under a Chinese brand. "That is the reason why many companies are seeking a foreign identity."

Wang said there are still essential differences between the real foreign brand and the fake one, even if both are made in China. Famous foreign companies will implement their standards of production and after-sale services, which will protect legal rights of customers, he said.

What to do

Wang said two laws can help consumers maintain their legal rights if they suspect something they bought was falsely labeled: The Contract Law of the People's Republic of China, issued in 1999, and the Law on the Protection of the Rights and Interests of Consumers, 1993.

"The two laws emphasize the honesty and credibility of both sellers and purchasers, as well as purchasers' right to obtain information." Wang said. "Purchasers can get back all the money paid. In some cases, they can also ask for compensation for the loss."

He said that Chinese consumers seldom seek redress in the courts for such losses because few are aware they can do so. "If people's attitudes gradually change, fewer companies will take the risk" to cheat customers through such means as a fabricated foreign identity.

Li Guangdou, an analyst on brand competitiveness, said Chinese companies have greatly improved their manufacturing capacity during the past three decades, but they still lag their Western counterparts in brand promotion.

"It results in some Chinese customers having a higher recognition of foreign brands, even though many Chinese companies can also produce high-quality goods," Li said on Wednesday. Li expects that the Da Vinci case will prompt Chinese consumers "to be more rational about foreign brands".