Why are Western brands getting it wrong in China?

A spontaneously exploding product, and a corporate customer placing giant ads in New York’s Times Square to rubbish your brand may seem to be the imaginings of a fictional crisis management exercise. For Tesla’s China operation both events happened in the last month, and the brand’s PR floundering is making matters worse.

Crisis to catastrophe
In China, Tesla is far from being alone as a Western brand whose PR often causes more harm than good. Burberry, Mercedes, Nars Cosmetics, Cadillac, Lancôme, Balenciaga, Audi and Dolce & Gabanna have all recently managed to turn incident to catastrophe of varying degree. Though D&G is undisputedly the outstanding performer in this regard.

Last autumn, the Italian fashion brand released a video to promote its annual flagship catwalk show in Shanghai. The content implied that Chinese people cannot eat Italian food, and threw in sexual innuendo for good measure. A predicable backlash resulted, but that was far from the end.

Designer Stefano Gabbana thought nobody in China would see his opinion on the matter if he posted on Instagram. Unbeknown to him several million Chinese nationals use the platform, and when he used a faeces emoji to describe the Chinese nation reports exploded onto social media in China. The government cancelled the fashion show, key celebrity brand ambassadors resigned, consumers not only boycotted D&G, but rushed to return purchases, and for the first time online retail giant Alibaba delisted a foreign brand.

Tesla blows up
Tesla’s recent woes began in earnest when it suddenly slashed the price on its Model 3 sedan leading to large-scale social outrage from those that had purchased the car just before the drop. But then two weeks ago a Tesla was recorded on car park CCTV spontaneously exploding in a quite spectacular fashion. Since then Tesla has failed to quell the surge of discontent about faulty cars. This peaked with a Chinese ride hailing company taking out giant ads in Times Square demanding action regarding its broken-down Teslas.

Cultural divide
The reason brands from the West find themselves unable to handle crises in China is mostly due to lack of psychological and cultural understanding of Chinese consumers. This results in relying on strategies from back home. 

This flawed approach applies not just to in-house departments, but to Western PR agencies, In China too few senior managers have actual ground level knowledge of China, so they instruct junior Chinese staff according to what they know, and history tells us the rest.

Chinese knowhow
When a crisis arises in China it is important to act with lightning speed using content based on an intimate knowledge and understanding of brand audience, and Chinese people as a whole. This means having experience of living in China, speaking the language fluently as well as knowing crisis management.  

It is essential that companies take full responsibility for problems even when fault may lie elsewhere. Blame shifting is considered weasel behaviour, and usually exacerbates negative consumer sentiment. Apologies must not only be broadcast in China, but also on Western social media in Mandarin and English as a sign of proper respect to Chinese consumers.

For British brands crisis situations in China mostly begin at board-level back home, and with marketing leadership that lacks real understanding of Chinese consumers. False assumptions arise, and poor decisions cascade down the hierarchy through damaging instruction.

The solution is to understand that China is actually the most complex and sophisticated consumer environment anywhere, and that it requires specialist understanding and treatment. Anything else makes brand reputation susceptible to blowing up like a parked Tesla. 

Written by Domenica Di Lieto, chief executive officer of Chinese marketing consultancy Emerging Communications