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Author: 
Dr. Mohamed A. Ramady
Publication Date: 
Mon, 2007-07-09 03:00

Consumers throughout the world, and mostly in the developing markets, seemed to tolerate a general level of poor service, shoddy goods, and were resigned to their fate. Who could complain against the giant brands of the world and be heard? This situation is now changing, at least in the developed world, where the days of the docile consumer seem to be over. The engine of this shift in attitude seems to be the Internet, and people are no longer tolerating the status quo. The “consumer is the king” again it seems. Can this new era catch on in the Gulf and the Kingdom? Will consumers here band together and force manufactures and service providers to sit up and take notice, lest they be left aside and lose market share? The Kingdom has paved the way for consumer power, by establishing the Consumer Protection Association, with the aim of defending the rights of consumers and to protect them from fraud and counterfeit.

The Internet can be both an instrument of personal liberation and access to information, or it can be misused. What has happened though is that this twentieth century marvel of technological progress has been harnessed for the good of consumers, and, in the long term, producers alike.

Headlines are being made about consumer revolts, ranging from protests about excessive or unfair bank charges, to petitions against foreign takeovers of one’s favorite football club. Citizens, once known for accepting their fate with resignation and dignity, are now eagerly signing electronic petitions by the millions and embarrassing governments and corporations. The British government’s proposed plans to introduce further motoring charges has been temporarily stumped by the millions of e-signatures of enraged citizen who are saying enough is enough. While the British government could ignore this, just like it ignored other mass protests of its citizens in another context before the launch of the disastrous Iraq adventure, yet it can do so only at its electoral peril. Online consumer rebellion is here to say.

Surveys of consumer protection groups have indicated that people are now more likely to take action than before. Unlike the past, when suppliers of goods and services were limited to a few national companies, mostly state owned, the era of privatization has opened up the world of competition. If people perceive they were not getting a fair deal, then alternatives were at hand. If local producers could not satisfy this demand, then international competition would meet it. The full force of globalization comes to bear, as one of the major benefits of globalization has been to reduce prices for local consumers. The Internet allows consumers to shop around. Incompetence in terms of over pricing, shoddy goods and lack of after-sales service can be spotted, challenged and punished by consumers, who are now free to shop elsewhere with their money.

The Internet allows special consumer groups to monitor product ingredients and force manufacturers to either come clean about product content, or remove misleading products from the market. No manufacturer is safe, it seems, however big the brand name as the makers of Mars bars chocolates have recently found out. They had to do a swift U-turn over their plans to use animal products in their chocolate, called rennet, to avoid a huge public backlash from UK vegetarian groups. Other mega brand names that also had to do U-turns following consumer backlash, were Disneyland in Hong Kong, when environmentalists threatened a global boycott of the theme parks when Disneyland announced plans to serve shark fin’s soup, and Proctor and Gamble’s decision to withdraw its popular orange drink called Sunny Delight. This was apparently in response to a public outcry and concern when it was claimed a little girl turned orange after drinking large quantities of it.

Today, consumers, particularly in the West, but also in younger generations worldwide, have become increasingly health-conscious and environmentally aware. The Internet allows for the closest of scrutiny to take place, and the introduction of genetically modified products, nicknamed the “Frankenstein Foods,” has spurred on the consumer power movement.

It is not only in consumer goods that privatization has benefited consumers, but also in the service sectors, such as in utility distribution. The old jokes about British Telecommunications or British Gas are no longer valid, as consumers switch and change to utility suppliers that offer even more competitive products. The consumers get to know of these new offers through the Internet and consumer action groups. More efficient technology has also enabled a wider choice of providers in telephone operators and banking services. Just notice the difference in the Gulf and Saudi telecommunications market in the era of more service providers. The switch away from a current service provider can either be affected by friendly marketing techniques or driven by a large degree of consumer frustration and pent up anger at companies. Once consumers reach this boiling point, it does not take much to translate this anger and direct it at corporations, or to adapt a popular saying, “hell hath no fury like that of a consumer scorned.” This fury is magnified, when consumers read about ever rising corporate profits, seemingly at their expense.

Will this consumer Internet revolt catch on in the Kingdom and the Gulf? The Internet is still in its relative infancy in terms of use and connectivity per head of the population in the Gulf, compared to the US or Western Europe. Even in these countries, there are pockets of consumers, such as the elderly, who are missing out on the new dynamics of consumer power, as they seem somewhat frightened by it. However, such marginalized citizens might decide to invest in a few hours of Internet training, if they perceive that they could also benefit to further their own particular consumer issues, such as exorbitant healthcare, old age retirement homes and services.

For consumer Internet campaigns to succeed however, there has to be a consumer champion, willing to mobilizes and touch a particular chord of discontent with the wider public. This requires disciplined action, organization, motivation and perseverance, something that is woefully lacking in today’s consumer driven Gulf society. Hope lies with the younger, Internet savvy Gulf generation. All it takes is for one consumer campaign to launch and succeed, and the momentum of consumer power will be here to stay in the Gulf. For once, consumers around the world have the upper hand against manufacturers, who not only have to cope with rival competition, but have to keep an eye open on consumer dissatisfaction, and try to pre-empt it by offering the expected level of goods and services. Keeping quiet and hoping that consumer revolts will go away is simply not an option now for local or multinational companies. Who knows, people consumer power might yet catch on in the Gulf....

(Dr. Mohamed A. Ramady is a visiting associate professor, finance and economics at King Fahd University of Petroleum and Minerals, Dhahran.)

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