Brands Spark Chi­nese Ire Over Sovereignt­y

● Com­pa­nies need to learn to be po­lit­i­cally sen­si­tive to­ward the world's big­gest lux­ury mar­ket.

WWD Digital Daily - - Front Page - BY TIANWEI ZHANG

Fash­ion needs a lesson in Chi­nese geopol­i­tics — and it can't come soon enough.

That is­sue came into stark re­lief over re­cent days as Ver­sace, Coach and Givenchy be­came the tar­gets of on­line ire for not ad­her­ing to China's ter­ri­to­rial claims in T-shirt de­signs, putting high­pro­file celebrity part­ner­ships with Liu Wen, Jack­son Yee and Yang Mi in jeop­ardy.

The con­tro­versy be­gan un­furl­ing on Satur­day when Yang Mi, China's top ac­tress with almost 105 mil­lion fol­low­ers on Weibo, China's ver­sion of Twit­ter, ter­mi­nated her newly minted con­tract with

Ver­sace, as an im­age of a Ver­sace T-shirt be­gan to cir­cu­late on Weibo.

The gar­ment was printed with store lo­ca­tions across the world. It listed Bei­jing and Shang­hai as part of China — not so Ma­cau and Hong Kong. In­stead, the brand la­beled them as sep­a­rate en­ti­ties. China's on­line com­mu­nity be­came in­fu­ri­ated.

On Mon­day, Coach and Givenchy ran afoul of the same sen­si­tive is­sue as In­ter­net users found T-shirts sim­i­larly mis­la­beled.

All brands apol­o­gized pro­fusely across so­cial me­dia. Donatella Ver­sace said on In­sta­gram that she was “deeply sorry for the un­for­tu­nate re­cent er­ror” and “wanted to per­son­ally apol­o­gize for such in­ac­cu­racy and for any dis­tress that it might have caused.”

Coach apol­o­gized for the “huge” over­sight and promised an in­ter­nal re­view for its prod­uct de­signs and web site. “Coach is com­mit­ted to longterm de­vel­op­ment in China, re­spects the feel­ings of the Chi­nese peo­ple, and sin­cerely ac­cepts the su­per­vi­sion and cor­rec­tion of the vast num­ber of con­sumers. We will con­tinue to pro­vide qual­ity prod­ucts and ser­vices to Chi­nese cus­tomers,” the Amer­i­can brand said in a state­ment is­sued within two hours af­ter Wen, Coach am­bas­sador and China's most high-pro­file model, pub­licly dis­tanced her­self from the brand.

Givenchy also ex­pressed re­grets on its of­fi­cial Weibo ac­count say­ing: “We apol­o­gize for the mis­take in Givenchy's printed T- shirts in over­seas mar­kets that has aroused dis­cus­sion among some ne­ti­zens to­day. For any hu­man neg­li­gence or mis­take, we must cor­rect it im­me­di­ately and take it as a warn­ing. Givenchy al­ways re­spects China's sovereignt­y, firmly upholds the one-China prin­ci­ple and is unswerv­ing.”

This wave of in­ci­dents is dif­fer­ent than the Dolce & Gab­bana de­ba­cle last year, when its Shang­hai show was abruptly can­celed af­ter in­sults about China were at­trib­uted to the In­sta­gram ac­count of de­signer Ste­fano Gab­bana.

The Chi­nese govern­ment did not es­ca­late Dolce & Gab­bana's fall­out to a diplo­matic level, as it did not touch the na­tion's po­lit­i­cal bot­tom line. "In­stead of ask­ing a For­eign Min­istry spokesper­son, you might as well ask any or­di­nary Chi­nese peo­ple and ask them what they think of it," the author­ity re­sponded at the time. This in­ci­dent has been dif­fer­ent. Peo­ple's Daily, the Com­mu­nist Party of China's news­pa­per, on Mon­day pub­lished a harsh com­men­tary, say­ing Ver­sace and Coach “have made fool­ish mis­takes, which not only ig­nited the Chi­nese peo­ple's right­eous in­dig­na­tion, but also made their brands' prospects in the Chi­nese mar­ket bleak. Es­pe­cially in the ‘sen­si­tive pe­riod' when Hong Kong proin­de­pen­dence forces are cre­at­ing chaos. This kind of mis­take is even more se­ri­ous.

“To do busi­ness in China, you have to abide the Chi­nese laws," the pa­per added. "This is a mat­ter of prin­ci­ple. To th­ese un­ruly multi­na­tional cor­po­ra­tions, in ad­di­tion to con­demn­ing, we should also take some self-de­fense tools from the ‘tool­box.' All en­ter­prises that dam­age China's sovereignt­y should be alerted."

This lat­est Chi­nese sovereignt­y scan­dal comes amidst the in­creas­ingly tense back­drop of protests in Hong Kong, where its in­ter­na­tional air­port was es­sen­tially shut down Mon­day and more than 150 flights can­celed as de­mon­stra­tors clashed with au­thor­i­ties.

The protests be­gan in June over a bill that would have al­lowed peo­ple to be ex­tra­dited to Main­land China. That bill was sus­pended, but the demon­stra­tions have con­tin­ued and the rhetoric has be­come more heated. A com­men­tary on Xin­hua, the of­fi­cial Chi­nese news ser­vice, noted, "With petrol bombs, brick-fir­ing sling­shots, bows, and even air­guns, black-clad mob­sters have cre­ated an at­mos­phere of terror on the Hong Kong streets."

That cli­mate has mag­ni­fied the re­sponse to any state­ment that sug­gests Hong Kong might not be a part of China, which of­fi­cially took con­trol of the re­gion in 1997 and op­er­ates it un­der the prin­ci­ple of "one coun­try, two sys­tems."

Alexandra Brodie, part­ner of law firm Gowl­ing WLG, stressed that "big brands need to put the time into re­search and work to bring a greater di­ver­sity of in­put into their de­ci­sion-mak­ing as mis­takes like this are en­tirely avoid­able, but cause great harm once made.”

Bei­jing held a com­par­a­tively loose at­ti­tude to­ward fash­ion com­pa­nies — be­fore the Hong Kong protests erupted and Sino-Amer­i­can trade war es­ca­lated. Last year, China asked U.S. flights to China in­clud­ing United Air­lines, Amer­i­can Air­lines and Delta Air Lines to com­ply and not list Tai­wan as a coun­try on their web sites.

Zara and Coach were called out for the same mis­take on drop-down menus on their web sites, which have a “search coun­try” op­tion, as opposed to the more po­lit­i­cally neutral phrase “search re­gion.” Both fixed the mis­take promptly.

Aside from Hong Kong and Tai­wan, po­lit­i­cally sen­si­tive areas also in­clude Ma­cau, Ti­bet and Xin­jiang. Even in­di­rect re­la­tion­ships can im­pact the par­tic­i­pa­tion of Chi­nese celebri­ties, as they are held up as so­ci­etal role mod­els and are strictly mon­i­tored by the govern­ment for pa­tri­otic sen­ti­ments.

For in­stance, Chi­nese stars pulled out of at­tend­ing an am­fAR fundraiser in 2017 be­cause one of the auc­tion lots in­cluded spend­ing time with the Dalai Lama.

The con­tro­versy comes as China is poised to ac­count for 40 per­cent of global lux­ury spend­ing by 2025, ac­cord­ing to McKin­sey.

And it comes amidst a rise in Chi­nese celebri­ties and mod­els, both in editorial chan­nels and as brand am­bas­sadors, rais­ing the risk of geopo­lit­i­cal sna­fus — and se­ri­ous back­lash.

Be­sides Wen, Du Juan, Ming Xi, Xiao Wen Ju, Shu Pei, Chu Wong and Lina Zhang ap­pear on count­less run­ways and in many global cam­paigns. And brands are tap­ping Chi­nese celebri­ties and banking on their pop­u­lar­i­ties. Louis Vuit­ton has Chuxi Zhong, Kris Wu and Liu Hao­ran; Prada chose Cai Xukun; while brands like Dior and Chanel as­sign one big name to each prod­uct cat­e­gory to max­i­mize the reach.

Liu Wen, Jack­son Yee and Yang Mi.

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