How to handle crisis management in China

After D&G’s recent PR disaster in China, Domenica Di Lieto, CEO of Emerging Communication explains why every company needs a crisis management plan for China

Anyone with half an eye on public image management in China cannot have failed to notice the increasing rate at which Western companies are both getting it wrong, and then failing to deal effectively with the consequences.

Just when it seemed all possible avenues for creating public offence had been exhausted, along comes Dolce and Gabbana, who created a video so controversial that it eventually resulted in the Chinese Government cancelling its flagship Shanghai fashion show on the grounds of public upset.

But D&G is far from alone in committing blundering faux pas in China. The Italian luxury brand joins a list of illustrious names that have almost effortlessly found ways to antagonise Chinese consumers. Western PR fumbling in China is certainly not new, and yet poor crisis management continues to exacerbate already raw situations.

Companies whose management and marketing generate accidental insult are unlikely to have an effective crisis management plan in place, or the ability to quickly create and implement one. That nobody in a company is aware that something like using a quote from the Dalai Lama to promote a brand could cause offence is a clear indicator of a corporate body ill-prepared for modern Chinese consumers.

Properly informed leaderships that invest in effective marketing are unlikely to make cultural, commercial or geopolitical mistakes, or ever need to implement a crisis plan. But they should have one anyway.

Not every crisis is of a brand’s own making. The actions or statements of Key Opinion Leaders, celebrities and even staff of third parties can wreak havoc, as was seen in the case of Balenciaga. The fashion house came under fire after department store security staff manhandled a Chinese customer queuing to get into its Printempts concession in Paris. The luxury brand was roundly blamed and committed the cardinal mistake of not facing up to problem either quickly or openly enough.

The basic mantra of crisis management in China should be to publicly embrace the problem, explain what is being done to put it right, and broadcast this as widely as possible. Entering into a game of ‘he said, she said’ on Chinese social media or elsewhere will only drag a brand further into the mire.  Instead, when a crisis arises companies must act quickly, take full liability, and there should be no attempt to make protracted excuses as they are likely to generate more negative sentiment.

An apology should be broadcast on all Western social media as well as Chinese. In the latest debacle by D&G, it was messages posted on Instagram that dealt the biggest blow; the video in question remained there long after it was taken off Chinese social media. On seeing this, messages were quickly relayed back home by some of the millions of Chinese nationals based in the US and Europe.

The basic mantra of crisis management in China should be to publicly embrace the problem, explain what is being done to put it right, and broadcast this as widely as possible

A lack of apology on Facebook, Twitter and elsewhere is seen to be conspicuous by its absence. An apology must be replicated everywhere as a sign of respect to Chinese people, and global acknowledgement of the mistake made.

In the case of D&G in November, it released a patronising social video to promote a fashion show. It featured a Chinese model struggling to eat Italian food with chopsticks, and was reportedly followed by designer Stefano Gabbana using a ‘poo emoji’ on Instagram to describe China, and writing: ‘we live very well without you’.

D&G did not apologise, but blamed hackers, a statement that was not only viewed with scepticism by Chinese consumers but also conflicted with a video later made in which D&G leaders apologised for their ‘words and actions’.

A much better example of crisis management can be seen in the actions implemented by Marriot when its Chinese facing website created an outcry by listing Tibet and Taiwan as separate to China. However, the hotel group acted quickly. It apologised publicly, changed the website, and the individual who was said to be responsible was dismissed. Prompt and effective action kept damage to a minimum.

In terms of crisis preparation, nothing in China can rival March 15 of every year. The annual Consumer Day sees PR executives across the country focusing furiously on TV screens at the annual broadcast of the show ‘3.15’, as it runs through its marathon round up of companies spotlighted as having failed consumers. Companies that fear being included, no matter how slim the possibility, have crisis management plans and materials ready to go, should the worst happen.

But of course, prevention is better and cheaper than cure. For UK companies this should include senior executives being comprehensively tutored in Chinese culture, politics, commercial and consumer behaviour, and the individuals responsible for marketing having an even more thorough understanding of Chinese living, if not being actual Mandarin speakers with experience of living in China. If internal preparation of this type is not a realistic proposition, then it is important to hire in a resource that does have the required knowledge and experience. Crisis management aside, such an approach significantly improves strategic planning, as well as return on marketing investment.

Crisis situations in China begin at home in the boardroom and with senior marketers due to lack of awareness. It is much easier, and more cost-effective, to avoid public approbation through education than to rely on crisis management.

Domenica Di Lieto is the CEO of Emerging Communication