With heightened political and social tension between Hong Kong and mainland China, luxury brands should pay extra attention to what they say, do, and sell. Over the weekend, a problematic shirt design landed Versace at the center of heated debate on Chinese social media, pinpointing the gravity of political and social ignorance.
Within several hours, Versace issued an official apology, as did its founder, Donatella Versace. But the damage was already done — millions of users joined in persecuting the brand, while its newly appointed China brand ambassador, Yang Mi, cut ties. The anger did not stop there, as Chinese netizens quickly accused other brands like Coach and Givenchy of anti-China sentiment due to similar product designs.
The controversy started with a Weibo post on August 11: a netizen posted an image of a Versace T-shirt from its 2019 Spring and Winter collection, which listed Hong Kong and Macau as independent countries. The image immediately made its rounds on social media, with multiple netizens calling Versace’s brand ambassador to “come out and take a stand!”
Roughly two hours following the Weibo post, Versace’s newly appointed China brand ambassador, actress Yang Mi, issued a claim on Weibo announcing the termination of her contract with the brand. “The shirt designed by Versace has allegedly damaged the independence of Chinese authority and territory…as a Chinese citizen, I feel very angry!” Yang Mi said.
Many of Yang’s fans showed support and praised the actress’s fast response and integrity. “China can’t be undermined (中国一点都不能少)” quickly became a trending slogan as a protest against Versace. At the time of publishing, #Versaceapology (#范思哲道歉) was read more than 780 million times and garnered 48,000 discussions.
Perhaps learning from the Dolce & Gabbana controversy last year, Versace reacted quickly. Roughly 12 minutes after Yang Mi’s post, Versace issued an apology on its official Weibo account, admitting there had been a mistake with the T-shirt’s design and stating it was taken off the shelf since July 24 and had been destroyed. At the time of publishing, Versace’s T-shirt has also been taken down from various third-party E-commerce platforms, including Tmall, JD.com, and Vipshop. The brand also reinforced its stances on China and Hong Kong politics, stating, “We completely respect the sovereignty of China's territorial state.”
Meanwhile, netizens complained about the absence of apologies on Western social media. Shortly after, the brand's founder, Donatella Versace, also issued an apology on Versace's various social media accounts including Facebook, Twitter, and Instagram. “Never have I wanted to disrespect China’s National Sovereignty,'' said Versace. The legacy designer took full responsibility for the house’s mistake, promising, “the brand accepts its accountability and is exploring actions to improve how it operates day-to-day to become more conscientious and aware.”
Versace's relatively quick response and top-down approach shows improvement compared to how Dolce & Gabbana handled their own controversy last year. But the response did not stop Chinese netizens from comparing the debacle to D&G, which suffered considerable backlash in both sales and reputation in China.
Chinese netizens took their anger out on social media, exposing foreign brands’ lack of cultural insensitivity when dealing with the Chinese market. “Chinese citizens have zero-tolerance for any issue can challenge China’s national sovereignty,” commented a Weibo user named 'big fish and small fish,' “Respect, or else lose your business in China!”
As Chinese netizens are crying out, brands who profit from the Chinese market have a responsibility to respect the country's culture and political climate. The days where a company could look at the Chinese market as a fresh source of revenue without doing their groundwork in the market are long gone. This one misstep on Versace's part has placed both the brand and its parent company, Capri, in a precarious position.
Carpi’s first-quarter financial report published in August revealed Versace as a heavyweight for the holding holding company, bringing in revenue of $207 million and beating analysts’ average estimate. Capri's first quarter 2020 revenues rose 11.9 percent to reach $1.35 billion, missing its goal by $26.4 million.
Since acquired by Capri last year, Versace has bet big on the Chinese market for growth, operating a total of 40 stores in China. Last June, the brand appointed actress Yang Mi as the brand ambassador, hoping to boost the brand’s prominence in China.
In the past, Yang’s proven commercial value has attracted many fashion and beauty brands, namely Michael Kors, Stuart Weitzman, and Estée Lauder, which have all seen sales pick up. At the time of the Versace appointment, according to the Jing Daily x R3 celebrity ranking, Yang was the No. 1 most buzzed celebrity in June and believed to be a strong asset to the brand’s future growth in China.
The backlash did not rest with Versace. Since the first outcry, savvy Chinese netizens have also exposed another brand, Coach, which previously released a shirt with Hong Kong listed as a separate country. The Chinese supermodel Liu Wen, who became Coach’s brand ambassador this July, has announced she will stop working with the brand. The hashtag #coachapology (“蔻驰道歉”) was trending on Weibo with pageview of over 9.6 million and nearly 6 million discussions. Netizens have also called out Givenchy for making the same design misjudgment, and brand ambassador Jason Yee acted quickly — the hashtag #JacksonYeestopscontractwith Givenchy#易烊千玺与纪梵希解约 was viewed 500 million times and has 112,000 discussions.
Last year's Dolce & Gabbana controversy was a warning cry for brands doing business in China. But this latest controversy is an indication that some brands have not yet learned. Above all, it calls company hierarchy into question: who is holding the decision-making roles in new markets and what procedures are in place to prevent cultural insensitivity? While the brands who have come under fire — Versace, Coach and Givenchy — were all quick to recall their actions, the apologies have proven too little, too late.