As the tenor and tariffs of the US-China Trade War continues to escalate, so has China’s nationalism with global brands caught in the cross-fire. Understanding the strength of their buying power globally, Chinese consumers have increasingly flexed their muscles with Dolce & Gabbana and Burberry previously feeling their wrath. Add to this the ongoing Hong Kong pro-democracy protests, and rabid celebrity fan bases who rejoice at the fall of their rivals, and you have a perfect storm.

 It all started with a Versace t-shirt which raised the ire of Chinese netizens forcing their newly named ambassador A-list actress, Yang Mi to terminate her relationship with the brand and delete all Versace posts from her Weibo account. Within minutes Versace responded on Weibo to apologize, claiming that the offending t-shirts “had been recalled and destroyed by all sales channels since July 24th” and reiterating their love for China and respect for China’s national territorial sovereignty. Unsatisfied with the Weibo posts, netizens also demanded apologies on international social media platforms. As a result, Versace CEO Donatella Versace apologized the next day on instagram and Facebook, stating that she was “deeply sorry for the unfortunate recent error that was made by our company.”

As internet sleuths hunted down other offenders, the domino effect on other brands continued with Coach, Givenchy, and Asics also facing backlash. Similar t-shirts were located from Givenchy (from 2017) and Coach (2018), resulting in Coach’s new global ambassador supermodel Liu Wen announcing the end of their relationship. Coach’s former celebrity ambassadors Guan Xiaotong, Xu Weizhou and Allen Ren also quickly took to their socials to confirm that they no longer had relationships with the brand. Pop Idol Jackson Yee ended his relationship with Givenchy Beauty while Elvis Han and Song Wei Long stepped away from Asics, and Maggie Jiang terminated her relationship with Swarovski. Swarovski apologized to Jiang and the Chinese people. Calvin Klein lost Lin Yuan, but their latest ambassador Zhang Yixing, as of yet, has only threatened to dissolve their relationship, if the issue was not rectified on their website.

Preemptively, Estee Lauder took down its Taiwan and France sites to update the designation in the store locators and Fresh also apologized for using the Hong Kong flag. Several fashion brand sites, including Burberry’s, were also taken offline for maintenance. 

 In the wake of the Hong Kong protests, Hong Kong and Taiwanese celebrities (such as Ouyang Nana) popular in China have been forced to declare their allegiance to the Mainland. Celebrities not wanting to run afoul of the government, their supporters, or the supporters of their rivals are quick to cut bait. Celebrities are the faces of brands in the China market, key traffic and awareness drivers, and vital to key campaigns and during key promotional periods.  94% of fashion brand’s Weibo engagement is driven by posts mentioning celebrities and 84% for premium beauty brands according to Gartner L2’s Digital IQ Index: Luxury China and the Digital IQ Index: Beauty ChinaFrom January-June 2019, Both Yang Mi and Jackson Yee accounted for more than 87% of the engagement generated on posts from celebrities about Versace and Givenchy Beauty respectively. Brand investments in celebrities are significant and competition for them is high. Most of the impacted brands did not have a strong supporting portfolio and will be starting from square one.

“Working with A-listers drives significant buzz and engagement for brands, but the attention goes both ways. As seen in Dolce & Gabana and Versace’s cases, celebrity drop-outs exacerbated the situation by drawing more eyes to brands’ misconduct and created a bigger challenge for PR. Brands need to understand the risk and prepare themselves to manage such negative outcomes,.” says Amie Song, APAC Advisory Specialist. 

 Back in March, MAC Cosmetics had to issue an apology for omitting Taiwan from a map of China in a promotional email. If Weibo trending topics are any indication, an apology may not be enough anymore. In fact, a hashtag translating  to “a mere sentence of excuse can’t solve the situation” was a top trending topic on Weibo. It was only after this recent incident that MAC also updated its US site.

Operating in China is riddled with unforeseen minefields, but global brands have to be proactive in protecting themselves from the country’s  cancel culture and quickly learn from other’s mistakes. If you are a global brand and have not reviewed all your websites (store locators, maps), product merchandising, and marketing collateral (emails) for references to Hong Kong, Taiwan, and Macau as independent territories, you are proceeding at your own peril.

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