Ask anyone in business these days or even ask a high school student in a basic economics class which country they think is the one country not to upset in regards to making profit overseas, and if the person you ask has even a microscopic understanding of the economy – their answer will surely be China.
With over a billion residents or as commerce watchers prefer to describe it as over a billion customers – almost half of the worlds trade is being operated within Chinese borders. There is money to be made in China and for a population whose riches rarely show any signs of slowing down – luxury is the indulgent response to a seemingly never ending wealth. It is no secret that China loves luxury and luxury loves China – annual report after annual report almost religiously reveal the continuous prosperity of the Chinese economy, which for the benefit of design houses have almost secured themselves a constant state of profit. To simply put it, the rich are just getting richer.
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For the longest time China had enforced a nationwide policy that stated families were to legally have only one child – an initiative designed to regulate their increasing growth rate, which to all intents and purposes had served its duty well. But with it meant children essentially never had to share an inheritance, a lucrative birth right that naturally came from not only their parents but also from two sets of grandparents whom only had one bloodline to pass down their hard earned efforts too. With mortgages secure, opportunities at the plenty and for the most part money being an issue of parental generosity a lineage of wealth was birthed – giving rise to a fortunate generation, now colloquially known as the ‘Crazy Rich Asians’.
With such a wide net of wealthy customers to reach – it would be considered wise from any business perspective to cater to such a large and lucrative market, even a small demographic within China could measure into the millions of customers. Like most countries clothes serve much more of a purpose than warmth and functionality- for many, particularly Asian cultures clothes are able to act as the distinctive divide between classes – so much so that the unspoken rumour of luxury labels entering China being able to automatically gain success is starting to ring true. So on the contrary to ignore or worse yet, damage appeal from the Chinese audience would not only be an incredibly poor business decision but also in so many ways – simply foolish. As much as high end brands are adored and lavishly bought within the Chinese market one label that will not be worn or even tolerated is a bad reputation.
Couture used to be something only rich folks cared about, an item of luxury that was almost exclusive in its distribution and market channel s- it was an ideal that well off individuals indulged in whilst common folk would pick at the crumbs and perhaps spoil themselves with a shoe or a logoed basic. Yet nowadays with social media acting as a global ambassador nearly everyone with a decent internet connection can gaze into a designer showroom and make judgement as if they were the intended customer.
With opinion being an open playing field which unlike ten years ago where fashion houses could not care less about the criticism discussed within offices or amongst friends – people are now listening to what is being said and as result are becoming increasingly aware of all sorts of happenings, making buyers more conscious about their expenditure and designers more delicate about their decisions. There is a lot to consider these days- if a runway does not include a black model, the headline concerning a lack of diversity is almost guaranteed, if imitations are too obvious the Diet Prada accounts are quick to expose and any missteps made however innocent or unintentional are immediately put under the microscope for public investigation.
For a time being nobody cared all that much about actual designers, label were very much associated with its aesthetic and commercial branding – Chanel is Parisian finesse, Versace is Italian showmanship and Burberry is an English sophistication. Flash forward to today however and are all of a sudden we are following Karl Lagerfeld’s cat on Instagram, sending prayers to Donatella’s anorexic daughter and even discussing Christopher Bailey’s sexuality and marriage. Designers, whether they like it or not are now celebrities and alongside their established vision we as consumers wear their fame and the glory of it.
But with every good public image there will always be good spokesperson, and the combination of the two is a great sign on the route to success- however the same principle applies vice versa. As evidenced time after time, controversy after controversy the old myth that any publicity is good publicity has finally been put to rest. Unless bad behavior is said only though spoken words behind closed doors with no witnesses – skeletons are no longer kept in the closet, a lesson clearly learnt too late at Dolce and Gabbana.
Following much public ridicule from the numerous controversies beforehand which truthfully at this point felt almost like telling a toddler to behave the final nail in the coffin came just prior to D&G’s much anticipated runway event in Shanghai they themselves deemed “The Great Show”. After an online promotion emerged featuring a Chinese model clumsily eating Italian food with chopsticks- which truth to be told almost suggested wearing their clothes made her lose all sense of logic – the label naturally faced backlashed from both the media and the public. Yet instead of forgoing the traditional route of issuing a pre-drafted apology, Stefano Gabbana (the seemingly technologically inept half of the brand) took it upon himself to add fuel to the already aggravated flame by sending private messages in defence of the absurd promotions which quite literally compared the Chinese to dogs and swine – turning a public relations oversight into a public relations suicide.
As soon as the internet caught news of Gabbana’s behaviour – models began to abandon the runway rehearsals, invited celebrities withdrew their attendance by taking to social media platforms to announce their distain for the brand and even the government got involved to shut down the event. Days soon after though- the aftermath was still unfolding, major department stores proclaimed their discontinuation of D&G products, online shopping channels soon followed suit and the brands reputation is now seemingly ruined within China evermore.
China is a great advantage in regards to making profit from the luxury goods industry – cities are constantly being built to accommodate the increasing population (of potential customers), much of the wealthy have bottomless bank accounts to spend and spoil and the culture of the country suggest an insatiable want for a finer appeal. So from an outside view it could appear to be a win win relationship between China and D&G yet in this new age of social justice and political correctness no mistakes go without punishment. Millennials are quick to speak and the younger generation within China are no exception – just because they have money to spend does not mean they cannot spend it elsewhere and although they speak an entirely different language it does not mean they cannot understand.
Severing ties with China on such a global platform will undoubtedly not only affect profit sales within the country but potentially cause irrefutable damage to publicity. Still any famed figure wearing D&G will immediately be made aware of the company’s behavior. It was estimated that last year Dolce & Gabbana posted a revenue of 1.29 billion dollars in which 25% of the capital raised derived from the Asia – Pacific region much of which came from China itself. However considering the report was published before the controversy it is predicted that the design house will lose up to 20% in brand value – a monetary hit not easy to bounce back from. Losing China as a customer and attempting to resolve the issue with a universally agreed poor apology is a significant monetary adjustment- one that is in the hundred million dollar figure. Saying sorry to China in the insincere manner that is was is almost similar to an athlete shooting themselves in the foot and hoping for the best – the damage is done and there is simply no redemption.
Nowadays social justice does not forget nor forgive and now only time will tell the true consequences of a struggling public relations team. All because of one man’s mouth the profitable retail bond with the Chinese consumer base is damaged which truthfully is almost bad enough but Dolce & Gabbana must now look to the rest of the alert world for profit, although even that at this point is risky territory. There is arguably no business in the world that would willingly reject China as a consumer base let alone racially insult the country to almost guarantee a forever tarnished relationship but what happened was nothing short of irresponsible and despite the company’s claim or rather unbelievable excuse of hacking their actions are barely justifiable and now they have to live in an aftermath that will seemingly be their reality for a long time. Zhù hǎoyùn (Good luck).
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