When luxury brands court controversy

Let me give you a glimpse of the Chinese luxury consumers and market, which recently came into the news for boycotting Italian luxury brand Dolce & Gabbana over alleged racist remarks. 

According to a study, by 2025, the value of the global luxury goods market will climb to around $450 billion and 7.6 million Chinese households will represent $150 billion of that pie, an amount equivalent to the combined size of the US, the UK, French, Italian and Japanese markets in 2016. Chinese consumers will account for 44% of the total global market by 2025. 

So it is small wonder why all the luxury brand giants have their eyes on this market. They have all started customising collections based on important events such as the Chinese New Year to showcase how important China is for them. 

For Dolce & Gabbana too, the “Shanghai Great Show” was a step in that direction, in line with their strategy to capture this pie. But alas, it backfired. The Italian fashion house had to cancel a major show in the Southeast Asian giant after controversial videos and offensive private Instagram messages, allegedly sent by co-founder Stefano Gabbana, went viral on social media. Celebrities and models in China deserted the brand. The designer has denied writing the messages, stating his Instagram account was hacked. 

It all began with a promotional video featuring an Asian model in a red D&G dress trying to use chopsticks to eat pizza, spaghetti and a giant version of the Italian pastry cannoli. A series of direct messages on Instagram went viral where Gabbana complains about criticisms of the video. The Italian designer is then accused of making derogatory remarks directed toward China and the Chinese people as he defends the ads. The result was a mass boycott in China, even after Gabbana’s apology and a cry that his account was hacked.  

Another example of such controversial remarks is by champagne brand Cristal. It was the delight of billionaire rapper Jay-Z and he had used it in his music videos, resulting in huge publicity. That high was short-lived. The Economist interviewed Frederic Rouzaud, managing director of Cristal, in 2006 and he was asked how the owners felt about seeing rappers sip their gold in their music videos. “That’s a good question,” he replied, with a biting follow-up: “But what can we do? We can’t forbid people from buying it. I’m sure Dom Perignon or Krug would be delighted to have their business.” Jay-Z was appalled and the brand suffered the brunt of their racist views.  

A decade ago, founder of another well-known fashion brand Tommy Hilfiger faced the storm when he allegedly said that doesn’t want minorities wearing his clothes. 

And then is the controversial history of brands and their associations such as the story of Hugo Boss joining the Nazi party in 1931. The all-black SS uniform was produced by the Hugo Boss company, along with the brown SA Shirts and the uniforms of the Hitler Youth. Some of his factory workers during this period were also French and Polish prisoners of war who were forced into labour. 

These controversies have impacted their topline and bottomline adversely and also eroded the brand value to an extent that buyers decided not to be associated with them. These brands end up becoming a social stigma, an outcast in the respective impacted geographies among its hitherto-loyal clienteles. The need of the hour is a sensitisation drive among all luxury brands – from the owners to the ground attendants who directly handle customers every day. While these luxury majors clearly understand the economic importance of certain geographies such as China and India, they fail to give any serious heed to their culture and history. 

Let your quest for luxury continue. 

The writer is a luxury commentator and author of Dark Luxe and Decoding Luxe