What brands can learn in the fallout from D&G’s offensive Chinese ads

For many brands, selling to a lucrative young, Chinese consumer is high on the agenda but creating impactful ads in a market of very different cultural traits can be difficult. D&G’s gaffe may be extreme but there is a lot that brands can learn from this. The Drum sought the wisdom of Nicky Wang, managing director and head of strategy at WE Red Bridge and Katherine Lee, head of business development, Stink Shanghai - the Chinese arm of the global production company, to tell us how they work with global brands to hit the right note in China.

What for you was the real issue with this ad?

Wang: The original video was attempted humor, albeit in very poor taste. It was widely considered as offensive and disrespectful, but probably not enough to cause a crisis of this scale. What really tipped consumers was what came after; instead of clarifying the context of the advert, the brand's co-founder Stefano Gabbana managed to deliver an insult to the entire country through his Instagram post. You cannot really misinterpret his emojis, no matter what language you speak.

Lee: The initial release of the social videos had caused some discomfort amongst some viewers, but the breaking point was only when Stefano Gabbana’s patronizing views of the Chinese went viral. All of the A-list guests and influential KOLs pulled out of the show. There was a domino effect and it ended with public outcry. It seems the way Dolce & Gabbana interpreted humor in their three social videos did not consider the perspective and emotional response of the Chinese audience. With one of the richest histories in civilization, the Chinese are brought up with a lot of pride in their culture and country. From the script and casting to pronunciation of the brand in the video, it crossed the line of acceptance and was disrespectful towards the Chinese. One of the key props in the videos – the chopsticks - were invented some 5,000 years ago in China and have spread to Japan and Korea. Technically, it is not unique to China alone but further leaks of the apparent private chats between the designer and an Instagram user was the last nail in the coffin.

Specific issues with the videos: The casting belied a western idea of a Chinese girl - bimbo-ish behavior, slanted eyes, dressed in very expensive D&G. Using chopsticks (they translated chopsticks in Chinese to “little stick”), and the narrative “is it too huge for you?” - every element carries racist teasing. In the voiceover, the way they pronounce Dolce & Gabbana in a “manglish way” is sarcastic to the Chinese.

How did the reaction/fallout impact the brand?

Wang: The fallout has been huge. Whilst previous luxury brand crises have created a storm online, they rarely impacted sales. This one is different; it is on a different scale. They have alienated Chinese consumers around the world and, considering they account for 1/3 of global luxury purchases, that it is a significant setback for the brand. Celebrities are stepping away, consumers are returning goods and all major e-commerce platforms in China have de-listed their products. This is unprecedented.

Lee: Many boycotted the brand after the incident. The store was completely empty on a weekend at one of the malls with the highest traffic. The luxury business thrives on popular culture and current trends. The designer represents the brand so he’s being held personally responsible for his words and actions, which was detrimental. It was unlike previous fiascos by other brands. This became a stinging satire of Chinese culture. Unfortunately, it came across as a personal attack.

Local consumers have gained so much confidence and sophistication in every respect. Most of them are well-traveled now, they have been exposed to worldviews, so they possess a strong point of view and know their importance in the current retail climate.

Big e-commerce brands were quick to de-list goods, how much of an impact will that have?

Wang: Although e-commerce still only represents 7% of total online luxury purchases in China, the statement it made was significant. The e-commerce giants in China have been courting the luxury brands for years, so the fact that they would pull the brand off the shelf overnight says a lot about the severity of the situation.

The knock on effect is that it is likely to impact confidence among wider retailers to stock their products in the future. Lane Crawford, a Hong Kong-based retailer, has already halted the sale of D&G’s goods in their stores, as well as online.

Additionally, there is the loss of their celebrity presence to consider. D&G can forget about appearing on red carpets in China any time soon, with celebrities all standing up to demonstrate their patriotism.

Lee: There are too many luxury brands out there today serving the same demographic, the Chinese consumers possess big spending power, they know their place in the current global retail climate. Most will not feel they missed out on anything with one less brand; there is no lack of access to information in this day and age, consumers move on to the next big thing with alarming speed, especially in China. These e-commerce brands are the main search engines of any luxury goods for consumers here. Once the brand does not exist on the platforms, it means there is no brand presence nor channel for any proper marketing and sales activities.

How can they come back from this?

Wang: Good question. It’s hard to see at the moment. The apology video they made has not been well received. It was deemed to be insincere, and obviously, you cannot take those emojis back.

But there are steps that a brand can take to come back from crisis situations: Own the mistake. Communicate. Brands often go completely quiet after a crisis, however, this is exactly the time when transparency and open communications are most valued. Be authentic. Particularly with a brand with a strong attitude like D&G, it is important to keep your authenticity, as even at times of crisis, you have consumers elsewhere that still have a deep brand affinity. Be patient. As this crisis highlights, it can take just minutes to lose brand trust, but typically years to rebuild it.

Lee: If even a public apology is deemed insincere, the brand could transform its weaknesses and turn them into strengths at this moment. To be delisted from e-commerce platforms and getting so much flak from the public may be a time to keep a low profile. The brand could use this as an opportunity to go back to basics – focusing on the physical stores. Narrowing the channels of accessibility to the brand could create a different kind of desire in consumers looking for very exclusive products. Consumers are overloaded with an excess of information and options today. There was a time when choices available to us were limited, when shopping was a simple and personalized experience, utilizing our five senses. And it was an absolute pleasure.

What will the impact of this be outside China?

Wang: Chinese travelers made over 130 million outbound trips in 2017. The loss from their buying power alone will be significant to markets outside of China. D&G’s lack of red carpet presence may not be limited to just China. Western celebrities who are reliant on China for their personal brands might be thinking twice before wearing D&G.

Lee: The Chinese shopper has become a powerful commodity for the past ten years, as seen from luxury stores around the world hiring Chinese frontline staff to serve the Chinese customers. It will be quite certain that they will boycott the brand outside China, but not necessarily all Italian brands per se.

What would be your advice to brands looking to grow in markets they aren’t as culturally close to? What lessons can we learn from this?

Wang: Listen, learn and truly take the time to understand your audience. Each market is different and it is so easy to make a misstep. WE’s recent Brands in Motion research discovered that, in China, across seven out of eight surveyed categories consumers said no matter how much they love a brand, or a category, if they step out of line they will gladly share them. It’s important to work with people in the market who can guide you. Social media is global – any content you push out in a particular market has to be bulletproof everywhere. We don’t even have Instagram in China and yet that post was across our platforms in minutes. There is no such thing as a personal opinion if you are the face of a brand or organization. Think before you press send.

Lee: Foreign brands ought to be sensitive to local history and culture, especially in political and racial arenas. With the easy accessibility of Chinese and Western social media, there is no lead time when a piece of information leaks, so the advice and insights from the local teams of different markets must be highly considered and valued.

Stink has had an office in Shanghai for eight years and Beijing for over one year. Working with major global brands, including leading fashion labels, we always support our foreigner directors to get accurate local insight – from the local dynamics to the unspoken areas to avoid and the right words to communicate with the local client, which is totally contributed by our local team.

You can find very good examples from our cases for JD.com - Break the Hectic by director Jovan Todorovic and Nike ‘Shanghai Fast’ by director Nicholas Winding Refn.

NIKE "Shanghai Fast" from Stink Films on Vimeo.

jd.com - Hectic Breaker from Jovan Todorovic on Vimeo.

We also set up our direct to brand digital offering - Stink Studios - in Shanghai with the same spirit - to carry out the better results for clients in this unique market. World class creativity, married to local knowledge. This is our learning.