By Suwatchai Songwanich
CEO Bangkok Bank (China)
Last month, the Italian company used a video featuring a Chinese model struggling to eat Italian food with chopsticks. The advertisement’s narrator then compounded the insult by using sexual innuendoes relating to size.
Matters became even worse when explicitly racist messages were posted on Dolce & Gabbana’s official Instagram account and that of co-founder Stefano Gabbana.
While the company apologised for the messages – saying their accounts had been hacked and that the company had nothing but respect for China and its people – it was too little, too late.
Within days, luxury platforms had removed the brand from their sites in response to the outcry, citing concerns about racism and immorality. Dolce & Gabbana was forced to cancel a high-profile fashion show in Shanghai, after models and celebrities threatened to abandon the brand.
The public relations disaster was further escalated by social media activity. Individuals posted videos of themselves destroying their Dolce & Gabbana clothes, or picking them up with chopsticks and dumping them in the trash.
Analysts believe the controversy will hobble Dolce & Gabbana’s reputation and growth in the world’s largest luxury market where high-value consumers can have considerable influence over a company’s fortunes. Dolce & Gabbana opened its first store in China in 2005 and it now has 44 boutiques.
The incident shows that international brands that lack understanding of China’s cultural sensibilities can jeopardise their balance sheets by failing to sense-check their marketing strategy and content. Offending customers is always a bad business move and, given the size and scale of China’s luxury market, potentially disastrous. Chinese consumers spend over US$7 billion each year on luxury goods, according to the consultancy McKinsey. That’s nearly one-third of the global market.
Preserving trust in a brand in an increasingly interconnected world requires that international companies take extra care to avoid decisions based on cultural bias, or ignorance. Instead of dictating everything from head office, they would be wise to seek the counsel and insights of their Chinese teams and advisers.
China will soon account for 50 per cent of global luxury brand sales. The smart brands that want to succeed cannot afford to anger consumers in such a prominent market.
For more columns in this series please visit www.bangkokbank.com.