Mumuso and likes getting away with gentle fines?

Mumuso, Miniso, and similar brands are being investigated

Mumuso and similar firms are facing the highest administrative fines of VND100 million ($4,424) and VND140 million ($6,194), according to Decree No.185/2013/ND-CP stipulating fines for administrative violations for producing and trading in fake goods and Decree No.71/2014/ND-CP stipulating the sanctions on violations of the Law on Competition.

However, lawyer Kieu Anh Vu from KAV Lawyers Company in Ho Chi Minh City told VIR that the administrative fines of violating the origin of goods and labelling rules are not high enough to discourage such practices because the illicit profit earned from these violations is likely much higher than the fines.

Despite no reports being at hand about the brands’ revenues in Vietnam, with Mumuso’s rapid pace of opening four stores in a single month as well as the expanding of each brand’s dozen stores within two years, it can be said with reasonable certainty that these are not small businesses at all.

Targeting Vietnamese consumers who love foreign goods with eye-catching designs at reasonable prices, Miniso, Mumuso, Ilahui, Minigood, Yoyoso, and Ususpo, by registering business in South Korea and Japan but establishing headquarters in China, have been developing strongly with hundreds of fashion convenience stores across the country.

“Fashion convenience stores create new demand instead of meeting consumer demand like traditional stores. For instance, despite the fact that you have a lot of pans, you still want to buy a Miniso pan due to its flowery design. They are familiar things but have something new,” said Duong Thanh Tam, Miniso Vietnam’s former CEO.

However, after the Chinese origins of Mumuso and Miniso goods were revealed, a large number of domestic consumers have expressed disappointed with the brands on social networks and many said they would stop buying their products.

According to VIR’s observations, the Mumuso store on Trang Tien Street (Hanoi’s Hoan Kiem District), which draws in strong crowds because of the many nearby entertainment destinations, has been recording poor sales after 7 PM, when people go downtown for relaxation and fun.

Based on the latest report on Mumuso Vietnam’s violations related to the origin of goods, Minister of Industry and Trade Tran Tuan Anh in early August assigned the Domestic Market Department, Vietnam Competition Authority, and the Market Surveillance Agency, to investigate all firms that run business models similar to that of Mumuso in Vietnam.

On July 12, the MoIT announced the results of its inspection on Mumuso Vietnam’s compliance with the laws of Vietnam between early 2016 and May 31, 2018. Accordingly, 2,257 out of 2,273 goods were found to be imported from China, with the rest being bought from domestic suppliers.

Accordingly, Mumuso Vietnam has violated consumer protection laws by providing insufficient information related to its products’ origins. While the information on its products refers to South Korea, there are no legal documents to prove they were produced in South Korea.