Con Cung JSC is set to be sued by one of its customers due to alleged evidence of false advertising of their products, as the domestic retailer of maternal and baby products, with DAIWA-SSIAM Vietnam Growth Fund II being the largest shareholder, is in the midst of a scandal concerning its product origin.

Origin scandal undoes consumer trust in Con Cung

In a scenario similar to Khaisilk’s, a once iconic domestic silk brand, consumers in Vietnam are calling for Con Cung, which specialises in importing Thai products and distribute them in Vietnam, to be investigated to determine where its products truly originate. Khaisilk, accused of using Chinese materials in its products, contrary to its commitment to using domestic silk, has experienced a severe impact on its reputation. As a result, a number of Khaisilk stores in Hanoi and Ho Chi Minh City were closed without a timeline to open again.

On May 22, after buying seven baby products in a Con Cung store in Ho Chi Minh City’s Tan Binh district, Truong Dinh Cong Vinh discovered that an original tag of the VND329,000 ($14.50) pink suit coded CF-G127011 was removed and replaced by a CF (Con Cung Fashion) tag indicating “Made in Thailand”.

Vinh called for the firm to clarify the issue, but instead of clearly explaining the origin of the items, Con Cung apologised and gave him a VND1 million ($44.24) voucher. Due to his dissatisfaction in the firm’s handling of the issue, Vinh sent a letter of complaint to the Vietnam Competition Authority.

“I do not mind the firm’s apologies and compensation,” said Vinh. “I just want the firm to clarify the issue related to the quality of the goods and the legal documents to prove the word ‘quality’, as is the firm’s commitment.”

On the evening of July 26, Con Cung released a statement detailing information related to the origin of the CF-G127011 product. This information included bills, the process used in offering the product to the market, and a letter which confirmed the manufacturer’s mistake in tags placed on the product batch.

Con Cung made no mention of its other products which have been confiscated by the local authorities.

Nguyen Duy Hung, CEO of SSI Asset Management (SIAM), the largest shareholder in Con Cung, expressed his opinion about Con Cung’s products, saying, “Goods with replaced tags are fake goods. Consumers buying fake goods is unacceptable,” Hung posted on his Facebook account. “The only way to resolve the problem is for Con Cung to make public all its steps before offering its goods on the market.”

Since receiving the March 2017 investment from DAIWA-SSIAM Vietnam Growth Fund II, a joint-venture fund between Japan-based Daiwa Securities Corporation and Vietnam’s SSI Asset Management Limited (SSIAM), Con Cung has developed rapidly, opening 130 stores within the last year. Currently, the total number of Con Cung stores across the country is 346.

Over the past few days, Con Cung’s Facebook page has recorded many comments related to the belief in product safety. The majority of them expressed disappointment with Con Cung, as well as worry that the products will negatively affect people’s children in some ways.

Hong Nguyen commented, “Con Cung’s goods are expensive. I’ve bought lots of stuff for the coming baby. Currently, I’m furious.”

Phuong Linh followed up by saying, “I bought milk for my babies. Right now, Con Cung makes me very worried. Being a mother, I’m very confused.”

Huynh Loan posted on Con Cung’s page, “I have bought only Con Cung stuff for my two kids for over six years. An issue like that leaves me with no safe options.”

On July 24, Deputy Minister of Industry and Trade Dang Hoang An signed decision No.2611/QD-BCT to establish an inspection team to investigate all Con Cung stores across the country. This came after the Market Management Department’s preliminary inspection of some of its stores in Hanoi and Ho Chi Minh City over the previous few days.

The inspection will last for 10 days from the time it was signed and applies to Con Cung’s business activities since January 2017.

Previously, the Ho Chi Minh City Market Management Department had inspected 70 Con Cung stores in the second city and confiscated over 5,000 products worth VND500 million ($22,123) in order to ascertain their origin. The department’s inspection results will soon be released.

VIR