DOLCE&GAB­BANA FIASCO SHOWS IM­POR­TANCE, RISKS OF CHINA MAR­KET

Apple Magazine - - Summary -

Don’t mess with China and its grow­ing cadre of pow­er­ful lux­ury con­sumers.

That’s the les­son Dolce&Gab­bana learned the hard way when it faced a boy­cott af­ter Chi­nese ne­ti­zens ex­pressed out­rage over what were seen as cul­tur­ally in­sen­si­tive videos pro­mot­ing a ma­jor run­way show in Shang­hai and sub­se­quent posts of in­sult­ing com­ments in a pri­vate In­sta­gram chat.

The com­pany blamed hack­ers for the an­tiChi­nese in­sults, but the ex­pla­na­tion felt flat to many and the dam­age was done. The Mi­lan de­sign­ers can­celed the Shang­hai run­way show, meant as a trib­ute to China, as their guest list of Asian A-lis­ters quickly joined the protests.

Then, as re­tail­ers pulled their mer­chan­dise from shelves and pow­er­ful e-com­merce sites deleted their wares, co-founders Domenico Dolce and Ste­fano Gab­bana went on cam­era — dwarfed against the larger back­drop of an or­nate red wall­cov­er­ing — to apol­o­gize to the Chi­nese peo­ple.

“We will never for­get this ex­pe­ri­ence, and it will def­i­nitely never hap­pen again,” a solemn-look­ing Gab­bana said in a video state­ment posted Fri­day on so­cial me­dia.

The apol­ogy video, and the sharp pub­lic back­lash that de­manded it, shows the im­por­tance of the Chi­nese mar­ket and the risks of op­er­at­ing in it. More broadly, it high­lights the huge and still-grow­ing in­flu­ence of China, a coun­try that can­not be ig­nored as it ex­pands eco­nom­i­cally, mil­i­tar­ily and diplo­mat­i­cally.

These trends are in­ter­twined in fre­quent out­bursts of na­tion­al­ist sen­ti­ment among con­sumers who feel slighted by for­eign brands or their gov­ern­ments. It’s not the first time a com­pany has apol­o­gized, and it surely won’t be the last. Mercedes-Benz did so in Fe­bru­ary for fea­tur­ing a quote by the Dalai Lama on its In­sta­gram ac­count.

For Dolce&Gab­bana, it could be mark the end of its growth in China, a mar­ket crit­i­cal to global lux­ury brands that it has cul­ti­vated since open­ing its first store in 2005 and where it now has 44 bou­tiques.

“I think it is go­ing to be im­pos­si­ble over the next cou­ple of years for them to work in China,” said Cary Cooper, a pro­fes­sor of or­ga­ni­za­tional psy­chol­ogy and health at Manch­ester Uni­ver­sity in Eng­land. “When you break this kind of cul­tural codes, then you are in trou­ble.

The brand is now dam­aged in China, and I think it will be dam­aged in China un­til there is lost mem­ory about it.”

That could shake Dolce&Gab­bana’s fi­nan­cial health. The pri­vately held com­pany does not re­lease its in­di­vid­ual sales fig­ures. But Chi­nese con­sumers are re­spon­si­ble for a third of all lux­ury spend­ing around the globe, ac­cord­ing to a re­cent study by Bain con­sul­tancy. That will grow to 46 per­cent of fore­cast sales of an es­ti­mated 365 bil­lion eu­ros ($412 bil­lion) by 2025, fu­eled by mil­len­ni­als and the younger Gen­er­a­tion Z set, who will make a grow­ing per­cent­age of their pur­chases on­line.

“With­out China, the hin­ter­land for growth, D&G will ob­vi­ously be in a weak com­pet­i­tive po­si­tion and in dan­ger of be­ing elim­i­nated,” the Chi­nese busi­ness mag­a­zine New For­tune said in a so­cial me­dia post Sun­day. “This is one of the ma­jor rea­sons why D&G fi­nally low­ered its head. They re­ally can­not sur­vive with­out the Chi­nese mar­ket.”

While Dolce&Gab­bana has dis­played a knack for so­cial me­dia en­gage­ment, invit­ing mil­len­nial in­flu­encers with mil­lions of col­lec­tive fol­low­ers to sit in their front rows or walk in their shows, that en­gage­ment has been a dou­ble-edged sword. Pop idol Karry Wang, who has drawn hun­dreds of scream­ing Chi­nese fans to the de­signer’s Mi­lan show­room for sea­son run­way shows, was one of the first to dis­avow the brand, say­ing he was end­ing his role as Asia-Pa­cific brand am­bas­sador.

Dolce found him­self on the de­fen­sive sev­eral years ago af­ter El­ton John lashed out for com­ments that sug­gested he did not sup­port gay cou­ples us­ing sur­ro­gate moth­ers to have

chil­dren. At the time, more than 67,000 tweets urged #boy­cottdol­cegab­bana, while Court­ney Love vowed to burn her Dolce&Gab­bana garb and Martina Navri­talova pledged to trash her D&G shirts.

Gab­bana, who has 1.6 mil­lion In­sta­gram fol­low­ers, faced a more con­tained back­lash ear­lier this year when he re­sponded to a col­lage of Selena Gomez pho­tos on In­sta­gram with the com­ment, “She’s re­ally ugly.”

Zhang and other celebri­ties took to so­cial me­dia Wed­nes­day to blast Dolce&Gab­bana and said they would boy­cott the show, which was can­celed. By Thurs­day, the com­pany’s goods had dis­ap­peared from ma­jor e-com­merce web­sites. The pre­vail­ing sen­ti­ment was cap­tured by an air­port duty-free shop that posted a photo of its shelves emp­tied of D&G prod­ucts: “We have to show our stance. We are proud to be Chi­nese.”

The rapid es­ca­la­tion into a pub­lic re­la­tions dis­as­ter was fu­eled by so­cial me­dia. In­di­vid­u­als posted videos of them­selves cut­ting up or burn­ing their Dolce&Gab­bana clothes, or pick­ing them up with chop­sticks and putting them in the trash. A par­ody of the of­fend­ing Dolce&Gab­bana videos, which fea­tured a Chi­nese wo­man us­ing chop­sticks to eat pizza and an over­sized can­noli, shows a white man try­ing to eat Chi­nese food with a fork and knife. At least three rap bands took up the cause with new songs.

“Com­pa­nies that don’t re­spect us don’t de­serve our re­spect,”Wang Zixin, team leader of CD Rev, a na­tion­al­ist rap band, said by phone from Chengdu, the cap­i­tal of Sichuan province. Its new song had been viewed more than 850,000 times on Weibo.

“We hope peo­ple will re­mem­ber com­pa­nies that have ever in­sulted China, and not for­get about them when the fall­out passes,”Wang said.

That sense of pride re­flects a na­tion­al­ism that has been en­cour­aged by the gov­ern­ment, of­ten in dis­putes China has with other coun­tries over other for­eign prod­ucts.

Sales by Ja­panese au­tomak­ers plunged in 2012 amid ten­sions be­tween is­lands both coun­tries claim in the East China Sea. The clash also il­lus­trated the com­plex­ity of Chi­nese sen­ti­ment: In­dus­try an­a­lysts said buy­ers didn’t want to be seen in Ja­panese auto show­rooms but went ahead with planned pur­chases once ten­sions had passed.

More re­cently, sev­eral for­eign com­pa­nies ran afoul of Bei­jing’s in­sis­tence that they ex­plic­itly re­fer to Tai­wan, a self-gov­ern­ing ter­ri­tory, as part of China. Many com­plied, show­ing how im­por­tant the Chi­nese mar­ket has be­come.

Delta, Amer­i­can and other air­lines agreed to re­fer to Tai­wan as part of China, and Zara now says “Tai­wan, China” on its web­site af­ter reg­u­la­tors crit­i­cized the fash­ion brand for call­ing Tai­wan a coun­try. Mar­riott an­nounced it “re­spects and sup­ports” China’s sovereignty af­ter it was or­dered to shut its China web­site for a week.

Ac­tor Richard Gere, a sup­porter of the Dalai Lama, has told The Hol­ly­wood Re­porter that movie stu­dios balk at hir­ing him for fear of an of­fi­cial or pub­lic back­lash that might af­fect ticket sales in China.

It re­mains un­clear whether the D&G mea culpa video will stop the back­lash — or if it will have im­pli­ca­tions for Made-in-Italy at large.

The scan­dal erupted as Italy’s high-end fur­ni­ture and de­sign com­pa­nies were mak­ing an an­nual pre­sen­ta­tion in Shang­hai and as Miu Miu, the Prada Group’s lit­tle sis­ter line, showed its cruise line in Shang­hai.

Ital­ian de­sign­ers have so far re­frained from com­ment.

Ital­ian com­men­ta­tors mused whether the Dolce&Gab­bana protests were truly spon­ta­neous or if there was some level of gov­ern­ment con­trol be­hind them. The gov­ern­ment has pub­licly said the spat had no diplo­matic el­e­ment and would not com­ment.

“Any­where in the world, an en­tre­pre­neur can make a mis­take, use in­ap­pro­pri­ate lan­guage. Usu­ally it is the con­sumers and the mar­ket to de­cide the se­ri­ous­ness of the of­fense,” the Mi­lan daily Cor­riere della Sera wrote in a com­men­tary. “Only in China is one forced to pro­duce a hu­mil­i­at­ing video with pub­lic self-crit­i­cism, like in the time of Mao’s rev­o­lu­tion. Now China feels pow­er­ful and is ap­ply­ing re-ed­u­ca­tion on a global scale.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.