What Luxury Can Learn From Watsons’ PR Disaster

What Happened: Domestic beauty chain Watsons is trending on Weibo’s Hot Topics due to a simple case of overpromising and an unruly livestreamer. The company sold out of a ubiquitous face mask which it was retailing for a paltry 0.01 yuan. Customers who were unable to buy the item logged on to Watsons’ live broadcast room to complain — only to be greeted by a volatile anchor who made the situation worse by insulting them. The resulting PR disaster has caused the hashtag #watsonsapologies to rack up 350 million views on Weibo, illustrating the ongoing interest in the story.  

The Jing Take: This latest incident highlights the nuance required to seamlessly navigate China’s trillion-dollar and highly influential livestream sector. Recently, L’Oréal was ensconced in an incident post-Double 11 — also involving face masks — in which it was accused of false advertising. But, whereas the French personal care company dithered and left citizens without an explanation for some time, Watsons was faster to apologize (both for running out of stock and hiring an unmanageable host). Even so, this dilemma shows that local and global names alike can mismanage the live-commerce format.

Recommended ReadingWhy Livestreaming May Not Be For Every Luxury BrandBy Avery Booker

In addition to an unwanted PR disaster, the more salient issue here is the fact that Watsons is struggling to maintain its relevance among young Chinese consumers. With 180 years of history, the Hong Kong-founded healthcare conglomerate is one of Asia’s oldest retailers and has 4,134 stores in China alone. However, since the pandemic, disruptors such as Harmay, Haydon, Color Wow, and The Colorist are now upending the market with more dynamic retail experiences, experiential spaces, and an enticing selection of brands to discover. 

This drama, moreover, not only reiterates the complexities of livestreaming, but also the growing competition from, and among, rising domestic players — heritage is not always a guarantee of success. 

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.