What Happened: Chinese star Lu Han, a former member of the popular K-pop band EXO, announced he cut ties with the Swiss luxury watch brand Audemars Piguet, which he has represented as ambassador since 2018. The reason is due to a video of the brand’s CEO, François-Henry Bennahmias, referring to Taiwan as a country in an interview that has circulated online. In a statement posted by Lu’s studio, he and his team urged the luxury watch brand to apologize in Chinese and English across all its platforms worldwide. However, as they failed to reach an agreement, the celebrity terminated their collaboration.
China claims the “One Country, Two Systems” policy it asserts in Taiwan is one sovereign state under the name of China, and it objects to any reference of the self-governing island and Hong Kong as a separate nation.
The Jing Take: It is a sensitive time for the domestic entertainment industry, following a series of crackdowns on celebrities, including Kris Wu jailed for sexual assault and Zheng Shuang fined for tax evasion. Meanwhile, the popular Chinese actress, Zhao Wei, was canceled for yet unknown reasons, and numerous stars have been investigated for “yin yang contracts 阴阳合同” — under-reporting their earnings by submitting a copy of their contract with a reduced salary figure to tax authorities.
Local idols are alert and moving cautiously to avoid becoming the next government target. In light of this crackdown, brands must be cautious as well. Luxury houses are bound closely with Chinese superstars, with companies benefitting from their loyal followers for years. Now that celebrities in China are being further pressured to conform to values espoused by the Chinese Communist Party, brands that do not conform are quickly boycotted — by local ambassadors and domestic spenders.
In 2019, Versace’s controversial T-shirt, claiming Hong Kong as a state, caused outrage among netizens, and the brand lost its ambassadors. And this March, over 30 celebrities cut ties with Nike, H&M, and Adidas after they stopped sourcing cotton from China’s Xinjiang province.
While it might be a risky period for brands to adopt Chinese ambassadors, they still resonate well with young, local buyers. For instance, Lu Han’s move has won him the appreciation of millions of netizens. The superstar is likely to have gained additional commercial value from patriotic consumers. Thus, brands do not need to fear endorsements with local KOLs but should rather be more prudent and have a deeper understanding of luxury’s biggest market.
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.