European Brands Need China – Dolce & Gabbana is Learning The Hard Way

China is currently the world’s largest economy in terms of purchasing power parity (PPP), having surpassed the United States in 2016. With China set to eclipse America in terms of overall GDP well before mid-century, it is becoming clear that international brands that want to retain their global market share must cultivate and expand their Chinese customer base. This is especially true of luxury brand items including cars and high fashion.

Earlier this year, German car market Mercedes-Benz learned first hand that it cannot be caviller when putting out advertisements in the Chinese market that are prone to repulse Chinese consumers. When The car company released an advertisement quoting the separatist agitator known as the Dalai Lama in an online ad targeting Chinese drivers, the reaction was predictably negative. Since 1959, the Dalai Lama has lived in India, but his globe trotting television appearances have made him a household name throughout the world, even among people who do not realise that he is a politically motivated separatist rather than a simple spiritualist.

In 1998, even the New York Times was forced to admit that the Dalai Lama’s organisations had received money from the CIA, a fact that had long been known to Chinese authorities who are aware that the US and India have used the figure as a soft-power weapon through which to threaten the territorial integrity of the People’s Republic of China.

China reacted strongly to the offensive Mercedes advertisement. Many Chinese took to social media to express their disgust with Mercedes-Benz, forcing the auto giant to issue multiple apologies. According to Mercedes-Benz officials,

“We will promptly take steps to deepen our understanding of Chinese culture and values, our international staff included, to help standardise our actions to ensure this sort of issue doesn’t happen again”.

It appears that when it comes to understanding China, western companies who are happy to sell their goods to prosperous Chinese consumers have yet to fully understand the culture whose wealth they seek to profit from. This appears to be the case in spite of the fact that a simple web search about the issue in question would have revealed that China takes challenges to its territorial integrity as seriously as all other nations.

If a company as large as Mercedes-Benz can make such an error, smaller corporations ought to take note of the issue so as to avoid causing offence among the world’s biggest consumer market. China is opening more and more doors of opportunity for foreign investors and businesses, however, China demands that all individuals and companies doing business in or with China show respect – a respect that is of course, reciprocated from the Chinese side.

But if the mistake made by Mercedes-Benz was motivated by a combination of ignorance and carelessness, an online post by Stefano Gabbana calling China a “country of shit”, was nothing less than a reflection of a hateful attitude on the part of the co-owner of one of Italy’s major fashion labels. While Gabbana claimed that the statement was not his and was instead the result of a hack, few people believe his explanation.

As a result, a Dolce & Gabbana fashion show in Shanghai has been cancelled while multiple Chinese e-commerce platforms have removed  Dolce & Gabbana products as Chinese buyers continue to call for a boycotting of the Italian company’s clothes and other goods. Adding insult to injury, the company promoted its not axed show in Shanghai with a deeply racist and downright vulgar advertisement in which a Chinese woman is shown being told how to eat Italian food with chopsticks.

Beyond China itself, Chinese living in countries from Malaysia to Italy have been holding signs saying “not me” in front of  Dolce & Gabbana shops as a means of protesting Gabbana whose denial of making inflammatory statements has not been viewed as credible by millions of Chinese.

While the European fashion industry has long been a place of casual racism, this has tended to be ignored by so-called western progressives due to the sexually libertine atmosphere which pervades the industry. However, when it comes to European racism against Chinese, consumers that brands like Dolce & Gabbana desperately need will vote with their pocketbook and likely do so in record numbers. As wages continue to stagnate across much of Europe, major European brands will come to rely on China ever more for sales in addition to their traditional American and Arab strongholds.

By offending the Chinese domestic market as well as ethnic Chinese throughout the world,  Dolce & Gabbana may well see its sales hit in a substantial way, not least because the Asia-Pacific region accounts for 30% of the company’s total revenue with much of this coming directly from the People’s Republic of China.

Ultimately, Stefano Gabbana can think whatever he wants but hateful and disgusting views will ultimately speak for themselves when he looks at his company’s profits which will certainly be hit due to his attitude towards what once was a major customer base.

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