Dior In Crisis In China

Dior in Crisis in China

Dior has become the latest major brand to inflict damage upon itself in China after it revealed a map of the nation that did not include Taiwan.

Dior presented a workshop at Zhejiang Gongshang University yesterday, showing a map that did not feature Taiwan. When students in the audience questioned the missing feature the presenter gave conflicting excuses. Within 12 hours a video of the episode had been viewed over 1 million times resulting in more than 3,000 comments.

Dior posted an apology within hours, claiming that the incident was the fault of an individual employee, and did not reflect the views of the company. This has not stopped the spread of the story on social media, but for the moment has stemmed what could have been a much bigger crisis.

The mistake by Dior has caused outrage among the population that is growing increasingly sensitive to the escalating series of cultural and geographic faux pas committed by Western brands that are considered to care more about getting money out of Chinese consumers than they are of respecting culture and people.

At the event, Dior representatives were asked why Taiwan, which is subject to territorial dispute, was not included on the map. Dior staff said they refer to China mainland as China, and China-Taiwan-Hong Kong as Greater China, which is why the island was not included on the map. The term ‘Greater China’ does not exist, and the view of the Chinese population is that there can be no deviation from the accepted definition.

Hundreds of brands are suffering major losses in sales in China after making cultural or geographic errors. Dolce and Gabbana has seen sales wiped out almost entirely in its largest market after its double mistake involving a promotional video showing a Chinese model clumsily trying to eat pizza with chopsticks, followed by Stephano Gabbana using a faeces emoji on social media to describe China.

Versace has also suffered significant losses in sales in recent weeks after identifying Hong Kong as a separate country to China on a t-shirt. A consumer boycott spontaneously resulted. Within a week Gucci, Calvin Klein, Givenchy, Coach and others made a similar mistake, and the results have been the same.

The National Basketball Association in the United States finds itself in a dilemma after a senior executive expressed support for Hong Kong protesters in a Twitter post. The resulting outrage among the Chinese population has caused television coverage of games to be cancelled, and puts an estimated $4 billion worth of Chinese revenue for the NBA under threat.

As national awareness has steadily increased around Hong Kong, companies identifying it as a separate country rather than a Special Administrative Region within Chinese borders will no longer be accepted by a public that understands its buying power. The same applies to Taiwan.

The latest spate of mistakes is not the first time this has happened. A similar ‘week of apologies’ occurred last year that impacted on several leading airlines and hotel chains.

Why do such corporate faux pas keep happening?

Companies to various degrees are still thinking with a Western mindset, and expecting whatever works in other countries to be more or less suitable in China. If senior executives and anyone within companies involved in communication, design and distribution in China cannot adopt a Chinese thinking then they need to appointment those that can reliably oversee those processes. Without it mistakes will happen, and they will be costly.

The Dior incident highlights the real danger of not localising assets. Having a way to vet content is important, but the biggest need is for senior managements to set agendas correctly, and instil them in brands at all levels and within all functions. Like most countries, China is a proud nation, but people have made allowances for the shortcomings of foreign brands that are increasingly seen to want consumers’ money, but fail to show respect.

When a crisis arises, companies must be fast and take full liability, and there should be no attempt to make excuses or hide behind a veil of legalese. Equally important is getting communications content right by having an intimate knowledge of the psychology of the audience. This requires experience of living in China and speaking the language fluently, as well as being well practiced in crisis management.

An apology must be broadcast on all Western social media, as well as Chinese. Not addressing the issue on global channels is viewed as disingenuous. Chinese consumers expect a sincere apology to be replicated everywhere as a sign of respect to the global Chinese community.

If you’re interested in learning more about China, consider joining one of our workshops:

Retail in China – Manchester Workshop

Retail in China – London Workshop

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