On January 30, the China Consumers Association (CCA) — China’s consumer rights watchdog — and the public opinion data center of People’s Daily jointly released the top 10 consumer rights “hot topics” of 2022. From the rise of “price assassins,” to “brandsplaining,” the list covers issues such as pricing, livestream e-commerce, the monopoly of online platforms, and the health and safety of live-action role play. These issues were selected for having the highest level of exposure on China’s social media, impacting the largest number of consumers, and causing the most severe damage to consumer rights. Although many of the controversies center around fast-moving consumer goods (FMCG), luxury brands can still learn a lot from these incidents. Here, Jing Daily summarizes three lessons that can help luxury brands avoid backlash in China this year. Chinese consumers heavily scrutinize brands’ pricing One buzzword that emerged in 2022 was “assassins” (刺客), which is usually attached to the name of product category to refer to an item that is unexpectedly expensive. The CCA describes “price assassins” as products that “masquerade” as regular ones by hiding pricing information. For instance, the term “ice cream assassins” went viral last summer after customers were shocked by the high prices charged by some premium ice cream brands, such as Chicecream, upon checkout. While Chinese consumers are unlikely to consider luxury items “price assassins,” they can still be caught off guard if brands insist that certain trending items be sold as part of a set. If consumers have to spend more to get their desired product, it could lead to accusations of unfair and deceptive retail practices. Therefore, if luxury brands want to bundle products, their reasons and prices must be communicated to consumers early and clearly. Moreover, the fact that “price assassins” became a top controversy last year suggests that Chinese consumers are increasingly demanding to know the justification for high prices. They will closely examine a product’s ingredients or craftsmanship to see if it indeed warrants its price. Brandsplaining: Don’t lecture consumers about your products The list explicitly names the Chinese premium kitchen brand Zhang Xiaoquan for its scandal last July, when a customer’s knife broke off from its handle while smashing garlic. Interestingly, what really caused the backlash against Zhang Xiaoquan was not the quality of the product; rather, it was the brand’s remarks that the knife was not supposed to smash garlic and that its products seek to correct Chinese people’s “mistakes” in cutting food. The lesson here is that brands must not respond to skepticism about their products by “educating” consumers. This is especially relevant to international luxury brands, as any lecturing on their part could be easily perceived as being condescending to local consumers, who are increasingly patriotic and also tend to do thorough online research before purchasing. In addition, luxury brands should think twice about launching products that could cause public skepticism in China in the first place. Last year, Balenciaga and Gucci were ridiculed on Chinese social media for their “tattered shoes” and “leaky” umbrellas. Although the real targeted audiences of such products are quite small, a skeptical public narrative could complicate luxury brands’ long-term expansion in China. Be cautious when engaging in livestream e-commerce Despite years of regulatory initiatives, livestream e-commerce is still a hotbed for consumer rights disputes. CCA identifies counterfeit products and fraudulent discounts as two major issues that even top livestream hosts are not immune from. After last year’s Double 11, the CCA reported that Bosideng and Shiseido provided misleading discount information. Of course, livestream e-commerce is an indispensable retail channel in China and has proven to be beneficial to luxury. Nevertheless, luxury brands should realize that livestreaming comes with its own set of challenges. While top hosts have the most followers, they also collaborate with hundreds of brands from different sectors. Thus, consumers might question their credibility when recommending luxury items. Miscommunication between brands and hosts on discounts could easily turn into a scandal as well. At the same time, many Chinese consumers’ chief reason for watching livestreams is to enjoy discounts. As such, luxury houses typically have to reduce prices somewhat to attract audiences. Each item is also only featured for a short duration during a session, meaning that it is difficult for luxury items to leave a deep impression on the average consumer compared to FMCG goods. Therefore, luxury labels should carefully consider which hosts to work with and which products to present during their livestreams.
