A famous Chinese proverb says, “When you drink the water, remember the spring.” Last week, Chinese consumers delivered a brilliant illustration of this. The target was the Italian luxury brand Dolce & Gabbana (D&G). How did it all start? Seemingly blithely. D&G had a show coming up at Shanghai, their largest ever. They developed an ad that showed a model trying to eat Italian food — pizza, pasta — with chopsticks. There was a voiceover too with a tone not quite flattering. Consumers saw it as insulting and racist.

The real problem started after that: the responses from co-founder Stefano Gabbana’s Instagram account ‘clarified’ that he is not stupid, that it was actually meant as a tribute, and something about people eating dog meat. In other words, the first responses were all dismissive. They didn’t acknowledge the initial consumer reaction as a valid grievance. D&G then went on to say the account was hacked and their legal team is looking into it, etc. But by then the damage had been done. The retribution was swift and how! In just four days, the 33-year-old brand was thrown out of all of China’s e-commerce platforms, thrown out of physical retail outlets, viciously criticised in the fashion press and social media. And, to close the full circle, D&G were forced to cancel the show at Shanghai too.

But why did the Chinese consumers react so ferociously to the D&G ad? How come huge numbers of consumers published videos burning the D&G products they owned? Short answer: Personal luxury goods touch the ‘core of the core’ of the consumer’s identity.

Personal luxury goods are items like clothing, footwear, bags and accessories, cosmetics, fragrances, jewellery, watches, and so on. An Armani or a Dolce & Gabbana would carry the whole gamut of the items, although most visible and noted for their ready-to-wear clothing.

These are categories that consumers most closely relate to as an extension of themselves and as expressions of who they are. The French in fact refer to clothing as the ‘second skin’. So any perceived insult by an apparel brand literally cuts close to the skin. You are what you wear, and burning it visibly erases and corrects an injustice, real or perceived. This is a truism. Our freedom fighters had also burnt fabric of British origin for similar reasons.

Chinese legacy

The effect in China, however, tends to be amplified by Chinese characteristics as it were.

China’s peculiar political history, a fractured cultural legacy and the present political make-up has created a lot of ‘vacuum spots’ that brands, in particular luxury brands, fill in.

Cars are, of course, the dominant and most visible luxury product possessed of symbolic value. In the 1990s , before China’s ascendance, Bangkok was famous as a surprisingly large market for Mercedes cars — the reason: it was a statement of personal financial health, and was a must-have if you wanted a bank loan.

Today social media adds a totally new set of demands on the demonstrations of who you are. Brands are a large part of that equation. Personal luxury goods are an exact fit for this. Niche luxury brands are particularly sought after, to create a personal signature style. China’s economic growth has helped them pull large swathes of their people out of poverty in the last 20 odd years. The upward social movement has been relentless and fast. So there is also a huge middle class that has emerged and still emerging.

This makes China a big market when it comes to personal luxury goods (PLG), regarded as the ‘core of the core’ of the luxury marketplace. Chinese nationals accounted for about one-third (32 per cent) of all PLG purchases in 2017. It has grown to this size from virtually zero in 2000.

The statistics refer to Chinese nationals and not China as such because 90 per cent of the PLG purchases were outside of China, by Chinese nationals. Mainland China purchases accounted only for some 10 per cent of this.

So a consumer uprising in China is, well, just one part of the problem. The D&G brand is going to be hit worldwide. It’s a direct hit on sales and not just a hit on reputation occasioned by media reports of some kerfuffle in China. D&G can expect to see the echoes of this in other markets too as footfalls of Chinese nationals vanish from their stores. Europe is a major destination for Chinese nationals for tourism and shopping — so the Italian D&G can expect to see it up close. There is a double whammy here. China has its own version of pretty much every single one of Google, Amazon, Facebook, Twitter, etc., and so there may be no visible, proximate cause for the problem as may unfold in the D&G outlets in, say, a Paris or San Francisco. They literally won’t know what hit them.

This surely must have weighed on the designers, who have since then delivered a clear, unequivocal apology, begging for forgiveness.

Sundarji doctrine

The whole episode is a text book illustration of an assertion by the former Army Chief Gen. K Sundarji: ‘You not only have to be strong, you also have to be seen to be strong, and seen as willing to use that strength.’ Call it the Sundarji doctrine if you will.

We have to see this also in the backdrop of the ongoing tiff on tariffs between China and the US. Clearly, the D&G episode is some collective exhalation of angst and anger, a manifestation of the Sundarji doctrine, albeit in an economic version. China dominates the manufacture of many of these items. A number of Chinese luxury brands are now making their forays worldwide, particularly jewellery brands.

India, and things Indian more generally, is periodically subjected to similar humiliation now and then. Hindu icons may appear on underwear, or the Indian flag is printed on doormats. In the case of doormats, early last year (January 2017). Amazon pulled the item off their Canadian stores — but an apology was not forthcoming till the External Affairs Minister delivered a clear message that she will use her strength to deny visas.

But the most striking feature of the whole affair is the sheer speed at which things unspooled. Pervasive social media and e-tail outlets not only create opportunities for rapid growth., they can also kill equally fast. The collapse of the 33-year-old brand to a near-death state took all of four days. With a global impact to boot.

The abject apologies of Messrs Dolce and Gabbana that followed also serve to remind everyone of one more fact — that ‘kowtow’ is a Chinese word after all.

The writer is a specialist in consumer behaviour and strategy.

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