What happened: Chinese companies continue to add to the relief effort in Henan. Alongside household names such as Alibaba, Bytedance, and Huawei, lesser-known local companies are now pledging substantial amounts to those affected. Mi Xue Bing Cheng — famous for selling very cheap bubble tea — pledged almost $3.4 million to help those affected while the shoe-maker Guirenniao offered $4.6 million despite operating at a yearly loss. The low-profile sportswear brand HongXing Erke also offered around $7.74 million, joining homegrown companies all over the mainland who have contributed to the relief funds.
The Jing Take: No matter how downplayed or low key, socially responsible donations rarely go unrewarded in China. Consumers are especially patriotic and, due to several factors such as distribution in the market, lower price positioning and integrated social media strategies, domestic names are seeing immediate effects of these acts of goodwill. HongXing Erke which has experienced difficulties in the past — including flooding and bankruptcy — witnessed a massive bounce in down jackets sales (despite the hot weather) while netizens have promised to patron Mi Xue Bing Cheng’s tea even if, according to some, “it contained insects.”
Whatever the motivation, the politics of charity is now big business in China. While the fallout of the Xinjiang cotton crisis arguably inspired (much smaller) donations from Burberry ($231,000) and H&M ($154,700), their contributions still helped boost their reputations among citizens. The halo effect afforded to native brands for their efforts is no less tangible.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.