The founders of the Italian fashion clothing retailer Dolce & Gabbana have issued a public apology to Chinese customers after one of its advertisements enraged locals and was dubbed racist. The company is expected to suffer a severe loss in revenues due to the incident.
The problem began when Dolce & Gabbana published an ad to promote their upcoming Shanghai show. In the video, a Chinese woman was shown unable to eat Italian food using her chopsticks, with the narrator asking whether it is “too big for you.”
When the video went viral, Chinese social media users were aghast at the racist connotations. However, what really made the public angry was an Instagram chat between company co-founder Stefano Gabbana and model Michele Tranovo in which the entrepreneur called Chinese people dirty and smelly. The backlash from the public was so huge that the company had to cancel the Shanghai show and issue an apology.
“We have always been in love with China… We love your culture and we certainly have much to learn. That is why we are sorry if we made mistakes in the way we expressed ourselves,” Dolce said in a video statement. “We will never forget this experience and it will certainly never happen again… From the bottom of our hearts, we ask for forgiveness,” Gabbana added.
Economic cost of customer anger
Dolce & Gabbana’s cultural misstep in China is expected to cost them a lot of business. In fact, several fashion stores have already pulled out the label’s merchandise from their shelves. Major e-commerce websites also delisted the brand’s items. Several Instagram influencers who used to support the brand have publicly ditched them following the incident.
“I think it is going to be impossible over the next couple of years for them to work in China… When you break this kind of cultural codes, then you are in trouble. The brand is now damaged in China, and I think it will be damaged in China until there is lost memory about it,” Cary Cooper, a professor of organizational psychology and health at Manchester University in England, said to Fox19.
Dolce & Gabbana began operating in China in 2005 and currently runs 44 boutiques. According to experts, the brand could lose 20 percent of brand value due to the backlash. Considering that Chinese consumers account for almost one-third of all global luxury spending, Dolce & Gabbana stands to lose a lot in revenues. Some market experts say that the incident will soon be a case study in business courses.
“It is early days for Chinese companies in building global brands… they will also need to pay attention to cultural sensitivities as they enter new markets… The rapid destruction of D&G’s brand value in China will be a case study for [companies worldwide] for years to come on marketing missteps, the power of social media, and crisis response in China,” St John Moore, partner and head of international business communication consultancy Beijing at Brunswick, said to South China Morning Post.
The Chinese are known to take harsh steps against companies when their national pride is hurt. In 2012, Japanese car sales in China plunged after the two Asian nations verbally clashed over the East China Sea. In February this year, Mercedes-Benz issued a public apology after one of their advertisements featured a quote by the Dalai Lama, who is labeled a separatist by the Chinese Communist Party.