Challenging times for foreign brands in China

There was a time when summer was described as the ‘silly season’. Not any longer, as events around the world continue to show.

Escalating protests in Hong Kong are proving that it’s not just business as usual. And with tensions on the rise, now is hardly a good time for international brands to be offending nations.

Yet in the space of less than a week, two household names appeared to do precisely that – both in the luxury sector (curiously Dolce & Gabbana also caused offence in China late last year, which might suggest a problem in the industry).

Brands say sorry

Versace apologised to China after one of its T-shirts was seen to have ‘Hong Kong – Hong Kong’ printed on it alongside other city-country pairs. Innocuous, you might think, but it proved costly.

Chinese actress and singer Yang Mi terminated a lucrative contract with the brand, which has 40 stores in China. A statement was published on popular social platform Sina Weibo explaining that “As a Chinese citizen, Ms Yang Mi is very indignant that Versace’s mistake blatantly defies the sovereignty and territorial integrity of China.” The statement went viral, attracting 640 million views.

Within days, Swarovski too was forced to apologise – after implying that Hong Kong was a ‘country’ on its website. In its apology shared on Facebook, the company pledged to strengthen its global brand awareness and review all its digital platform globally to ‘correct any inaccuracies’.

Swarovski also lost the support of their brand ambassador, Chinese actress Jiang Shuying, who will be terminating cooperation ‘as soon as possible’.

This is evidently a highly delicate topic, but the message is clear: brands that wish to do business in China must respect China’s ‘one China’ policy. That is, there is one China and Taiwan is part of this. Hong Kong and Macao are Special Administrative Regions within China. No ifs, no buts. That’s how it is.

Leave no stone unturned

August being August, now would be a good time to conduct a thorough audit. Every brand currently trading in China or wanting to do business in China should diligently go through their communications to ensure that nothing might be taken the wrong way – and they should do this now.

There is no room for error. Websites and social media are the most important places to begin – this is where most issues are happening – but leave nothing out. This also applies to internal communications – it’s amazing what gets out on social these days.

Marketing and communications staff need to be trained so that they are aware when they sign off on or plan new communications. This includes not only language, but also maps.

Third, brands should take extra care not to wade into political discussions or commentary online, however ‘woke’ they wish to be perceived. It’s best avoided.

But don’t leave it at that either. Brands should be mindful of cultural sensitivities. Dolce & Gabbana caused upset last year over a video showing an Asian model attempting to eat spaghetti with chopsticks. Something like this could be easily avoided with the right planning.

If you need help reviewing and updating your communications, managing a crisis (should the worst happens), or training your staff, get in touch.

How will Boris tackle China?

Boris Johnson in a rugby tackle

This post originally appeared on the Join in China website.

Last week proved an eventful one that left some across the nation feeling…a little hot under the collar.

Our national temperature record was broken again, topping 38 degrees in tech hotbed Cambridge (see what we did there). But more importantly, Britain saw a new leader appointed – a virtual unknown by the name of Boris Johnson.

Joking aside (though a sense of humour is invaluable in these prickly times), our new government promises to usher in real, and some might say divisive, change in the country.

Among the cabinet changes last week was Liz Truss replacing Liam Fox as International Trade Secretary, who will be spearheading the UK’s trade efforts around the world. Jeremy Hunt, who infamously slipped up on an official visit to China, and who recently was described as having a “cold war mentality”, was cast aside in favour of Dominic Raab as Foreign Secretary. As we write this, Raab is in Asia on his first overseas trip, looking to increase ties with 10 countries.

A global Britain

But where does emerging superpower China fit into our global Britain ambitions? These are also sensitive times in UK-China relations, from Huawei to Hong Kong. Where do we go from here?

It might be to soon to tell, and while this isn’t the place for in-depth foreign relations or trade analysis, it’s clear that our new Prime Minister has spoken in very positive terms about China in the not too distant past.

In a January 2018 interview (keep in mind that much has happened since) with Hong Kong-based Phoenix Television, the then Foreign Secretary described how he was “very enthusiastic” about the Belt & Road Initiative and furthermore very “pro-China”. He added that the UK was the first G7 country to join the Asia Infrastructure Investment Bank led by China (whose vice-president in Beijing is also a Brit – Sir Danny Alexander).

Belt and Road Initiative

While the Belt and Road Initiative is a subject of debate – the UK diplomatically describes itself as a “natural partner” – the trillion-dollar infrastructure project connecting east and west promises exciting commercial opportunities for specialists in financial services (fintech and green finance), design, consulting and construction. These are all things that we’re very good at in the UK.

So if you’re a project manager or construction consultancy, you may have the expertise required to make the new Silk Road initiative a success and share in the economic benefits.

Meaty rewards

If you’re not in finance or construction, there are still new opportunities to pursue. For example, beef exports to China have been approved, marking the end of a 20-year ban since the BSE crisis. This could be worth £230 million for British business in the next five years.

The approval of UK pork plants is also being fast-tracked (five have been approved already) – meaning the possibility of more pork shipments before the end of the year.

Perhaps at this point we should also highlight the enormous success in China of Peppa Pig – a pork export of a different variety – demonstrating the importance and impact of our creative industries. Peppa Pig joins a long list of successful cultural exports that include Mr Bean and Downton Abbey.

How Join in China can help

Of course, we are excited by the prospect of further collaborations between the UK and China, and by the opportunity presented to small businesses. We also recognise that it can be a bumpy ride for the uninitiated! This is why we are here to help.

Since 2012, we’ve acted as a knowledgeable, trusted partner to UK businesses wanted to make the most of the Chinese market. We’ll help you expand into China with confidence, from business or product sourcing to IP registration, culture training, digital marketing, and more.

Take the business advisory firm James Cowper Kreston (JCK), for instance, who we are assisting with Chinese social media management and business development. We provided on the ground support in China to JCK, who were attended a conference in Shenzhen, and with them launched a UK Innovation Centre, seen by the Chinese provincial government as a hub for investors.

These are early days in the new Boris Johnson era, and we will continue to do our best to keep you informed on emerging opportunities and the state of play between Britain and China. Feel free to contact us at any time, however, with comments or queries!

Promoting sustainable global trade through digital engagement

Container ship passing under Golden Gate Bridge

International trade is one of those things few of us think about on a daily basis (headlines excepted), but now and again we’re reminded of its colossal scale. I remember crossing Belcher Bay in Hong Kong once and seeing a mammoth container ship nonchalantly pass by, like a floating skyscraper.  God knows what it was carrying. Ancient mummies? Japanese toilets?

Fact is, the importance of trade to the world is enormous., and any wobble is going to be felt. There’s the trade dispute between China and the US , for instance, and closer to home, the Brexit shenanigans. The impact of these events will affect us all to a greater degree than almost anything else.

So it’s exciting to be providing digital support to a philanthropic organisation that is influencing the international trade debate. The Hinrich Foundation was founded in 2012 by an entrepreneur with an incredible career in international trade of six decades – and counting – and a solid vision. The founder’s mission: to encourage peace between nations through promoting sustainable trade.

The organisation does this through education and trade research. Take for instance the Digital Trade Project, which sizes the value of the digital trade opportunity for economies in Asia, including Malaysia recently (yes, I need to rethink my hair, among other things):

The Digital Trade Project has shown that digitally enabled services in Indonesia, for example, could grow by 13 percent by 2030, driven by online video advertising, among other exports. In even more relatable terms, demand for Indonesian content is growing. Perhaps you have heard of YouTube personality Raditya Dika – the standup comic is hugely popular outside his home country. 

I’m confident that Hinrich Foundation content will also grow in appeal among relevant audiences. I’m less certain about other predictions – don’t ask me about how the trade war between the US and China will pan out, or even Brexit’s prospects…