Do brand scandals follow familiar patterns in China?

The following is an excerpt from Jing Daily’s Insight Report, “Surviving Scandal in China’s Luxury Market”. Filled with market research, best practices and case studies, the report is essential reading for anyone who wants to avoid or limit the fallout from controversies when they arise. Download your copy of the report HERE.

From a historical perspective, there is no indication that international, or even national, brands will ever completely escape the cycle of outrage and boycott in mainland China – whether manufactured and/or encouraged by the authorities. central government, amplified by bots or sockpuppet accounts, or driven by grassroots consumers. Economic pressure is, and always has been, a powerful tool for Chinese authorities to keep international brands operating within their particular business parameters at the risk of fines, expulsion from the market or other punitive measures.

However, by recognizing the general context patterns around which these types of scandals and boycotts occur, companies can, at least, develop rapid response plans for several scenarios in advance. In the event that they are caught up in a wider geopolitical controversy that sees their home country in a dispute with the People’s Republic of China – such as the deployment of THAAD in South Korea or the dispute over Senkaku/Diaoyu Island in Japan – a specific response plan may include official statements. to be apolitical and to reiterate that operations in China will not be affected by the political dispute.

In the event of more violent boycotts – such as the 2012 anti-Japanese boycott which saw Japanese businesses in China suffer damages estimated at $100 million – precautionary store closures and statements on the reasons for such closures may be necessary. . But for houses that can afford it, a preventative measure (used by Japanese beauty brands in particular) is to consider launching Chinese-only brands or sub-brands, which are less likely to be targeted by nationalistic consumers when shopping. boycotts. An example here is Shiseido, which has rolled out exclusive China-only lines such as Aupres and Urara in recent years.

Another strategy to protect against anti-foreigner boycotts is to invest in local startups, as in the case of Spanish fashion and perfume company Puig’s backing of upstart perfume brand Scent Library in 2021.

Addressing fabricated or exaggerated outrage, however, can be a much more nebulous endeavor, with a mark left to one’s own judgment and often struggling to discern whether a particular reaction is warranted and whether an official response is needed. One example is Dior‘s response to the 2021 “slanted eyes” controversy, which was actually a largely puppet-and-robot fueled scandal that lacked widespread support among consumers familiar with Dior or the Chinese photographer’s work. Chen Man.

Although the brand likely acknowledged the manufactured nature of this controversy, Dior moved quickly to counter it, clarifying that the image of a model with small eyes was not a commercial advertisement for the brand. The luxury name also confirmed that all related content has been removed both online and offline, and posted a post on Weibo saying that it will continue to respect the feelings of Chinese people, abide by Chinese laws and to cooperate with the relevant authorities to strictly examine the works. go to public display. Dior fans who were unmoved by the attempted cancellation from the start remained, and further attempts to stoke controversy simply failed to gain traction.

Download your copy of “Surviving China’s Luxury Market Scandal” on our Reports page.

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