Dolce & Gabbana fiasco – Is it an end of the brand in China?
Business, Companies, Markets

Dolce & Gabbana fiasco – Is it an end of the brand in China? 

Last updated on December 3rd, 2018

Dolce & Gabbana learned a hard lesson after it messed up with China and its increasing population of powerful luxury consumers.

The luxurious Italian fashion line has been trying to overcome a crisis caused by their “disrespectful and racist” video ads and social media posts. The culturally insensitive video ad was launched to promote a major runway show scheduled in Shanghai. Allegedly, offensive comments were also delivered from co-founder Stefano Gabbana’s Instagram account.

The fashion show was speculated to be one of the biggest in the brand’s 33-year history. The promotional ad featured an Asian model finding it difficult to eat Italian food with chopsticks. The ad angered many celebrities as well and a boycott was demanded. The Dolce & Gabbana products were pulled out of the Chinese E-commerce sites after the backlash.

China is considered to be the world’s most important luxury market as Chinese purchases at home and abroad contribute to around 30 percent of global luxury goods sales.Founders & designers Stefano Gabbana and Domenico Dolce issued a video apology. However, the damage was already done. The brand had to cancel the show following the harsh criticism.

“This is a big brand crisis,” said Tulin Erdem, a professor of marketing at NYU’s Stern business school. “Sometimes brands do recover … but on a scale of 1-10, [this is] really high up.”

Kering, another luxury brand group and parent company of Gucci and Alexander McQueen, claimed to have sales in China as high as 30% in the first half of 2018. Hermes, a French luxury fashion house, credited sales for record profits over the same period in China.

According to McKinsey, Chinese consumers spend more than $7 billion on luxury goods each year. For luxury brands like Dolce & Gabbana, pushing away Chinese consumers would be a big loss in the long run.

“Our dream was to bring to Shanghai a tribute event dedicated to China which tells our history and vision. It was not simply a fashion show, but something that we created especially with love and passion for China,”the founders said in a statement on Instagram and Twitter.

The brand also said that Gabbana’s Instagram account was hacked and he didn’t authorize the offensive messages. “I love China and the Chinese Culture. I’m so sorry for what happened,”Gabbana wrote from his account.

Estelle Chan, a Chinese-French model, who withdrew from the show, tagged Dolce & Gabbana and Stefano Gabbana in her Instagram post and captioned it with, “you don’t love China, you love money.”

A crisis communications firm Comm Core Consulting Group feels the damage caused cannot be undone overnight. The brand would need to understand and respect Chinese culture going forward. “You can be a global brand. But you have to have local sensitivities,”Andrew Gilman, founder of the consulting group said.

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