Dolce&Gabbana fiasco shows importance, risks of China market

Don't mess with China and its growing cadre of powerful luxury consumers.

Dolce&Gabbana learned that lesson the hard way when it faced a boycott after Chinese expressed outrage over what were seen as culturally insensitive videos promoting a major runway show in Shanghai and subsequent posts of insulting comments in a private Instagram chat.

The company blamed hackers for the anti-Chinese insults, but the explanation felt flat to many and the damage was done.

The Milan designers cancelled the Shanghai runway show, meant as a tribute to China, as their guest list of Asian celebrities quickly joined the protests.

Then, as retailers pulled their merchandise from shelves and powerful e-commerce sites deleted their wares, co-founders Domenico Dolce and Stefano Gabbana went on camera dwarfed against the larger backdrop of an ornate red wall-covering to apologise to the Chinese people.

"We will never forget this experience, and it will definitely never happen again," a solemn-looking Gabbana said in a video statement posted Friday on social media.

The apology video , and the sharp public backlash that demanded it, shows the importance of the Chinese market and the risks of operating in it.

More broadly, it highlights the huge and still-growing influence of China, a country that cannot be ignored as it expands economically, militarily and diplomatically.

These trends are intertwined in frequent outbursts of nationalist sentiment among consumers who feel slighted by foreign brands or their governments.

It's not the first time a company has apologised, and it surely won't be the last.

Mercedes-Benz did so in February for featuring a quote by the Dalai Lama on its Instagram account.

For Dolce&Gabbana, it could be mark the end of its growth in China, a crucial market for global luxury brands that it has cultivated since opening its first store in 2005 and where it now has 44 boutiques.

"I think it is going to be impossible over the next couple of years for them to work in China," said Cary Cooper, a professor of organisational psychology and health at Manchester University in England.

"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."
"This is one of the major reasons why D&G finally lowered its head. They really cannot survive without the Chinese market."
Gabbana, who has 1.6 million Instagram followers, faced a more contained backlash earlier this year when he responded to a collage of Selena Gomez photos on Instagram with the comment, "She's really ugly."
By Thursday, the company's goods had disappeared from major e-commerce websites. The prevailing sentiment was captured by an airport duty-free shop that posted a photo of its shelves emptied of D&G products: "We have to show our stance. We are proud to be Chinese."