For global luxury brands, bracing for an occasional crackdown or boycott is a part of doing business in China. Needless to say, 2021 has been a particularly tricky year to navigate. While China’s ongoing crackdown on Big Tech and antitrust practices may be a good sign for brands, the tightened scrutiny of China’s booming celebrity culture, gaming addiction, wealth flaunting, and effeminate male aesthetics all carry long-term implications for the marketing efforts of high-end houses that depend on China’s lucrative luxury market in their post-COVID-19 recovery. Jing Daily takes a look at 2021’s top crackdowns. Also, for more of our 2021 end-of-year reviews, read here.
China’s crackdown on Big Tech
In March, President Xi Jinping called for an acceleration of new laws and rules for the country’s tech companies. “Some platform companies’ development is not standard, and risks exist,” said Xi in an address to China’s top economic committee, according to state broadcaster CCTV.
And Alibaba has been caught in the crossfire. After investigating Jack Ma’s empire and fining Alibaba $975 million for not reporting past acquisitions under the country’s anti-monopoly laws, the government went as far as to halt the initial public offering of Ma’s Ant Group. Alibaba, however, was not the only target. A dozen other companies, including Tencent Holdings Ltd. and Baidu Inc., were fined by regulators in March over past investment deals. Given this, how will this affect luxury? Read More
China’s crackdown on Celebrity and Fan Economy
China’s latest crackdown on celebrity and fan culture did not appear out of thin air. Rather, it has been a drawn-out process — really, years in the making — that began long before the summer of 2021 and the arrest of megastar Kris Wu. But Wu’s highly-publicized downfall did mark the end of an era for China’s hugely popular idol competition show genre, as well as set off a slew of official commentaries, notices, and regulations set to control celebrities, content, and the so-called “fan economy.”
And now, with the 20th National Congress set to take place in October 2022, there is additional cause for concern that both the media and entertainment industries in mainland China may not be exempt from further restrictions. Read More
China’s crackdown on Gaming
State-run Economic Information Daily, which is affiliated with the official Xinhua News Agency, recently published an article that likened online games to “electronic drugs” and “spiritual opium.” The piece specifically called out Tencent’s hit game, Honor of Kings (which Burberry had partnered with before Tencent canceled the deal amid the Xinjiang cotton controversy), as particularly addictive among Chinese youth.
China’s gaming industry has long been subject to strict regulation, with an emphasis on limiting how much (and what) minors can play. Over the past several months, market leader Tencent Games has made moves to appease regulators and stave off further crackdown, introducing measures such as their “Midnight Patrol” initiative to halt under-18s from playing into the early morning hours.
In the case of a serious gaming crackdown — especially in concert with more restrictions on displays of wealth — global luxury brands could see their investments in gaming be severely limited. Read More
China’s crackdown on wealth flaunting
In May, China’s Cyberspace Administration announced a series of policies meant to manage the country’s online environment. The agency vowed to clean up virtual “wealth flaunting” via strict and specific measures, such as blacklist filtering, rigorous content checks, and flagged content categorization. Additionally, online publishers will need to have government-approved credentials before publishing on a wide-range of subjects.
Xiaohongshu, the social platform famous for displaying ostentatious lifestyles, has recently updated its guidelines as a way to restrain its users from overtly showing off their wealth. In 2020 and early 2021, similar actions were taken by Douyin, which punished thousands of accounts for flaunting wealth in short videos on its portal. So, is social media still the ideal solution for luxury brands that want to connect with Chinese customers? Read More
China’s crackdown on “sissy men and other abnormal aesthetics”
On September 2, Chinese authorities announced a ban on “sissy men and other abnormal esthetics” on TV, encouraging broadcasters to “promote excellent Chinese traditional culture” instead.
In the latest crackdown on entertainment, video platforms are barred from airing idol development programs (think Youth With You and Produce Camp), as well as reality shows featuring celebrity children. On top of this, minors are prohibited from participating in idol groups, while artists who have violated the law and “lost morality” cannot return to work, sealing the fate of a long line of China’s canceled celebrities. According to regulators, these new rules are designed to address problems like wealth flaunting and celebrity worship and cultivate respect for morality. Read More