Coach, Givenchy Have Apologized to Chinese Consumers for the Controversial T-Shirts

Luxury brands Coach, Givenchy, and Versace have apologized to China for selling T-shirts that depict Chinese territory as independent countries.

Netizens found that Coach, Givenchy, and Versace listed Hong Kong, Taiwan, and Macau as separate countries in their specially designed T-shirts. After Chinese consumers complained about product issues, the brands apologized to Chinese consumers on main social networking sites in China and quickly removed the wrong products from the shelves to correct them.

Coach, Givenchy and other brands of Chinese brand ambassadors have ended them contracts with these brands to show their attitude and firmly upheld China's sovereignty.

China, the world's second-largest consumer market, had retail sales of $5.1 trillion in 2018, compared with $5.3 trillion in the United States. According to research firm eMarketer, China is expected to surpass the U.S. as the world’s largest consumer market by 2021. However, due to these incidents involving national sovereignty, these luxury companies may face the risk of losing huge Chinese consumers.

Researchers have found that Chinese consumer behavior is increasingly affected by political issues. At the time of the foreign brand incident, it was the peak of the China-US economic trade war, coupled with the tension between Hong Kong protests and the mainland. In this sensitive period, it is easy to make people misunderstand and even doubt whether these brands are making statements, even if the heads of these brands claim that these incidents are caused by negligence.

I hope that the practices of these brands are due to cross-cultural misunderstandings and not for other reasons. By studying in international market courses, I think these cognitive errors are caused by the fact that these brands deal with the business of other countries according to Self-Reference Criterion. The Self-Reference Criterion (SRC) is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions. The SRC can influence how a company positions products in the market and how to recognize the target markets.

When companies are dealing with businesses in other countries, it is necessary to understand the country's overall cultural background, rather than just defining some concepts with their own stereotypes. If foreign marketers plan to set the target market in other countries, a comprehensive study of the country's history and geography will help foreign marketers thoroughly understand the country's marketing environment and cultural background and avoid unnecessary misunderstandings.

Written By: Mei Zhang

WSJ Article Link: https://www.wsj.com/articles/geopolitical-faux-pas-prompts-foreign-brands-to-apologize-to-china-consumers-11565721993