Top 5 Luxury brands who lost the most by upsetting the Chinese community
Nowadays, Chinese shoppers are estimated to represent more than a third of the global luxury brand sales (around 33%). They contribute to more than two-thirds of the industry’s growth. The brands, mostly European or American, have to be careful regarding the Chinese market since cultural differences can impact the way in which brands are perceived. Moreover, the Chinese community has recently shown its ability to impact global brands thanks to the development of social media and the size of the Chinese population (1,435 billion).
1) Dolce & Gabbana
The Italian luxury brand released 2018 a marketing campaign called “tribute to China” which showed a Chinese model struggling to eat pizza, spaghetti and cannoli using chopsticks. Clearly, the campaign was low on sensitivity and high on Chinese cultural stereotypes.
A few days later, a screenshot of an Instagram discussion by Stefano Gabbana came out, in which he used the poo emoji to describe China.
As a result, the fashion house faced serious backlash on social media. The brand was forced to cancel at the last minute an extravagant show in Shanghai. Moreover, retailers in mainland China and Hong Kong have stopped selling D&G products, followed by the biggest e-commerce Chinese platforms Alibaba and JD.com, who pulled the brand from their websites. The damages made to the brand increased when their Chinese brand’s ambassadors, including Karry Wang Junkai (member of the band TFBoys) and the actress Dilireba terminated their contracts with the brand. It instantly turned into a financial loss for Dolce & Gabbana, and resulted in a lack of trust by Chinese consumers, costing them future business with the demographic as well.
2) Versace and Givenchy / Coach
VERSACE
In 2019, the Italian luxury brand released a T-shirt with a list of “city-country” pairs, including “Barcelona – Spain” or “Miami – USA”. It also described the Chinese-controlled territories of Hong Kong and Macau as independent countries with “Hong Kong – Hong Kong” and “Macau – Macau”.
Because of that, the brand was boycott by the Chinese market, and the Versace brand ambassador Yang Mi, one of the most famous actresses in China ended the contract with the brand. The end of Yang’s contract topic was viewed on Weibo (China’s main social media platform) more than 640 million times.
GIVENCHY & COACH
At the same time, the French brand Givenchy and the American brand Coach released a similar t-shirt with “city – countries” represented Hong Kong and Taiwan as independent countries.
As a result, the luxury brands were also boycotted by the Chinese people, and Coach lost the brand ambassador, Chinese supermodel Liu Wen. This event was followed by many Chinese people through Weibo and generated anger regarding Givenchy and Coach.
Those tree brands paid a high price by facing the boycott of their luxury brands and the loss of long-term customers because of the accidental violation of the “One China” policy in one of their products. This policy attests that there is only one state under the name China, and not two different states: the People’s Republic of China (PRC) and the Republic of China (ROC). The territories controlled by the PRC represent China (with Hong Kong and Macau), and the territories controlled by the ROC represent Taiwan and its islands. The “One China” policy represents the fact that both PRC and ROC are under one state called China and is governed by Beijing.
3) Balenciaga
In 2018, a security guard tackle a Chinese customer in the Printemps in Paris. A footage of the event was taken and led to more than two million comments and many more views on Weibo .
Presumably, a queue jumper was reprimanded by a Chinese woman, he then pushed her and threatened to punch her. The woman’s son intervened, and a security guard stepped in to stop him, using brutal force which can see on the video.
The Chinese interpreted this video as racial discrimination, which led to a boycott of Balenciaga products. On Weibo, the hashtag #BoycottBalenciagaDiscriminatesAgainstChinese has been viewed by more than 29 million times.
Nowadays, we have to understand the power of social media and the Chinese community, the most populated country in the world. Even if all five luxury brands have apologized, people have lost trust in them. This has negatively impacted sales, and an even more so when related to China. Social media is a great marketing tool but it requires brands to take responsibility and fully control their content, particularly when related to a powerful market such as China.
