D&G is still out of grace of China’s consumers – Shaun Rein

 

Shaun Rein

Dolce & Gabbana (D&G) got three years into hot water over racist ads and remarks with China’s consumers, and the row did not subside, says business analyst Shaun Rein. “It’s probably the only brand that I’ve seen the Chinese stay angry at for so long,” he told CNN.

CNN:

The brand has not signed a major mainland Chinese name since the incident. For a 2020 Chinese Valentines Day campaign, it used a combination of White and CGI models, dubbed “virtual idols.” And although hiring Chinese celebrity ambassadors and influencers could represent a way to regain trust in the country, it would be “career suicide,” according to Shaun Rein, founder and managing director of China Market Research Group.

According to Rein, it is the alleged Instagram messages, rather than the ad campaign itself, that continue to affect the label’s reputation in China. “It’s probably the only brand that I’ve seen the Chinese stay angry at for so long,” he told CNN.

The label’s recent moves to sue Diet Prada for defamation have only continued to “keep the story alive,” added Rein, who likened it to the “Streisand effect,” whereby attempts to cover something up only draws more attention to it. The lawsuit, which D&G declined to comment on, has created the impression that Gabbana “was mad that his private correspondence got out,” Rein said, adding that Chinese consumers felt the messages were “the true feelings, potentially, of the founder denigrating the Chinese people” — despite the fact that Gabbana and co-founder Domenico Dolce filmed an apology video shortly after the 2018 incident.

Not that the video won them any goodwill at the time. “(It was) like he was trying to save money and his brand, but it wasn’t coming from the heart,” Rein said. “Because again, if you say something publicly but then allegedly say ‘Chinese are s**t’ in private, then who’s going to believe you?”…

The online furor has had real-world ramifications for D&G. In 2018, the brand had 58 boutiques in China, according to NPR. Three years on, its website lists just 47, with shops recently closing in Beijing, Shanghai and Chengdu, according to industry publication Business of Fashion.

The label remains entirely frozen out of major Chinese e-retailers Tmall and JD.com, both of which pulled the brand from its virtual shelves soon after the 2018 incident. According to Rein, it is unlikely that the platforms will stock the brand anytime soon, as they are “petrified by these nationalistic consumers.”

“If you can’t sell on Tmall, you can’t do business in China,” he said, adding: “If I were Dolce and Gabbana, I would take two or three years off from investing in China.”

More at CNN.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Why the Chinese consumer cannot be ignored anymore - Ben Cavender

Ben Cavender

Dolce&Gabbana was the latest fashion brand to feel the growing power of picky Chinese consumers, but it will certainly not be the last one, says consumer analyst Ben Cavender to the New York Times.  “The reality is this is probably going to kill growth for them,” he said on D&G.

The New York Times:

“The consumer is more selfish right now in feeling that China has a rich history and culture and is now a world power — that we know we are your most important customer base and you need to respect them,” said Ben Cavender, a senior analyst at China Market Research, a consultancy based in Shanghai. According to the Boston Consulting Group, Chinese consumers are currently responsible for 32 percent of luxury goods sales worldwide, a number expected to grow to 40 percent by 2024, at which point the Chinese will drive 75 percent of the growth of the global market... 

Chinese state media also sought to limit the fallout. Hu Xijin, the editor in chief of the Global Times, called on consumers to be “more open-minded.” 

“Dolce & Gabbana was undoubtedly wrong, but sins do not equate to death,” Mr. Hu wrote on Friday on his Weibo account. 

Mr. Cavender, the analyst, was not so sure. “The reality is this is probably going to kill growth for them,” he said. The last time a consumer boycott erupted on this scale in China was in 2017 over South Korea’s embrace of an American missile defense system that China feared could be used to spy on its territory. Back then, protesters besieged branches of Lotte Mart, a South Korean supermarket chain. This year, it closed all of its stores in China.

More at the New York Times.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How Dolce&Gabbana messed up their China operation - Shaun Rein

Shaun Rein

Fashion brand Dolce&Gabbana got blamed for racism by its Chinese customers after using a promotional video, celebrities withdrew from a show planned for Wednesday in Shanghai and the brand withdrew its goods. The damage to the brand will be lasting, says branding expert Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order to AP.

AP:

The Italian luxury fashion house apologized and said both accounts had been hacked. "We have nothing but respect for China and the people of China," it wrote. 

The apology was too late to save a major extravaganza in Shanghai that Dolce&Gabbana had billed as one of its biggest shows ever outside of Italy. 

Major Chinese celebrities threatened to boycott the event, which had been scheduled for Wednesday night, and the company finally called it off. Actress Zhang Ziyi, who starred in "Crouching Tiger, Hidden Dragon," said that the Italian brand had "disgraced itself." An analyst said the bad publicity will have a lasting effect. 

"It's the kiss of death for Dolce&Gabbana," said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. "I expect them to have a real tough time over the next six to 12 months." 

The three promotional videos that led to the Instagram fiasco showed a Chinese woman using chopsticks to eat pizza and other Italian food. Many in China called them racist and full of outdated stereotypes. The videos were previously deleted from the company's account on Weibo, a Chinese version of Twitter. 

Rein said it's a big mistake when westerners come up with creative content but don't understand how the campaigns will be received by Chinese consumers. 

He noted a trend of rising nationalism in China. "So if you, as a western brand, do anything that looks like you are mocking or making fun of Chinese culture, that's a big no-no," he said.

More at AP.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.