Dolce & Gabbana's brand image tarnished by discrimination protests

HONG KONG - D&G's photo ban in the name of protecting intellectual property has left a sour taste in the mouth of Hong Kongers and damaged the fashion giant's brand there.

Dolce & Gabbana's brand image tarnished by discrimination protests

So far, Dolce & Gabbana has not issued any updates to its blanket press statement on 8 January: "Controversial statements reported in the Hong Kong press have not been made by Dolce & Gabbana nor its staff, and we strongly reject any racist or derogatory comments. It is regrettable that Dolce & Gabbana has been brought into this matter, but we wish to underline that our company has not taken part in any action aiming at offending the Hong Kong public."

When contacted, D&G told Campaign that it has neither a PR consultancy nor dedicated communications team in Hong Kong, and reiterated that the company has "no further comments".

On Sunday afternoon, almost a thousand people occupied the space outside D&G's store in Tsim Sha Tsui, holding placards denouncing the brand with words like 'D&Go Home', and sticking banknotes meant for the dead on its window display in a character pattern meaning ‘shameful’. Demonstrators said they wanted to voice their opposition to what they felt was unreasonable discrimination from D&G.
 
This unusual act of solidarity in protesting against a luxury fashion brand was caused by allegations that D&G security guards banned locals from taking photos of the the shopfront in Canton Road, but allowed tourists from mainland China to photograph unharrassed.

Offensive behaviour of D&G security personnel was also recorded on video by Sharp Daily, with one of them displaying physical aggression against its reporter. "'Don't take photos, you take away your camera or I will break it,' one guard was quoted as saying.

Napoleon Biggs, senior vice president and head of digital integration of Asia Pacific at Fleishman-Hillard, said the public anger was connected to the lack of freedom of expression in Hong Kong - a spillover of political disgruntlement during a sensitive time ahead of upcoming elections in the territory on 25 March.

Walter Jennings, partner of Kreab Gavin Anderson Hong Kong, added that this incident has escalated to a socio-political issue about rights, freedom and equality. "It seemed [on the surface] that D&G is trying to protect its intellectual property, but it did so in a clumsy manner".

In an earlier report, a protester told the SCMP rich companies had too much power in Hong Kong - a case of "luxury hegemony". The mass protest indicated resentment against big luxury retailers who are "increasingly reliant on shoppers from the mainland and have adopted a discriminatory attitude against locals," according to Dr Chan Kin-man, an associate professor at Chinese University's sociology department. 

Luxury goods in Hong Kong have enjoyed significant sales growth in Hong Kong recently, driven largely by mainland tourists from the mainland taking advantage of the fact there is no sales tax in the special administrative region.

D&G should not "simply throw itself at Chinese shoppers, and should be very careful not to spark any further outrage in Hong Kong," Chris Kyme, founder of Kymechow Communications said.

However, Biggs pointed out the sales impact from the controversy may be muted, since Hong Kongers contribute to a small percentage of the brand's sales in Asia. In total, China and other parts of Asia accounted for 16 per cent of Dolce & Gabbana's global sales in 2010, after a jump of 26 per cent from a year earlier. 
 
Chinese shoppers are also the ones buying more tax-free luxury products than shoppers from any other country, Campaign learned from tax-refund and shopping services provider Global Blue. In 2011, the Chinese spent US$2.15 trillion on tax-free products, a 56 per cent year-on-year increase.
 
"There will definitely be a branding impact though," Biggs said. "This will make it into one of those end-of-year top ten PR fiasco lists for sure."
 
At the moment, D&G's lack of action is causing harm to its brand. Jennings said, "No one is going to go online supporting D&G, because D&G is not online backing itself up". The retailer has not posted any replies to the explicit comments on its Facebook page.
 
Research by Wong, Doody, Crandall, Wiener, showed non-engagement suited the business of high-end marketing perfectly, as Ben Wiener, CEO of WDCW suggested to AdAge. He noted that little or no social media push may be required for purveyors of luxury goods who want to build an aura of exclusivity.
 
Even so, the long-term impact on D&G's brand image depends on what it does to mitigate the situation in the next two weeks during the lead-up to Chinese New Year - one of the most important festivals in Hong Kong, Biggs continued.

Jennings advised, "D&G needs to put a spokesperson in front of the media immediately, to step in and address the confusion over what security and salespeople have said. We have not seen any representative from the corporate PR department".

Kyme agreed, saying the company should apologise as soon as possible to take responsibility instead of distancing itself from the outlash. "D&G should not take Hong Kong consumers for granted," he said. "They should respect the place in which they do business. They should not underestimate the buying power of Hong Kongers; and also, as the current situation with sales tax in China may not last forever."

In contrast, Harbour City, the shopping mall that houses the D&G flagship store, has apologised for the "misunderstanding". A statement issued on its Facebook page said, “We will learn from the incident and listen to the views of people from different sectors.”

Karen Tam, senior manager of promotions and marketing at Harbour City, told Campaign on the phone that the mall was apologetic and was providing training to its own staff preparing them on how to handle future incidents, but was unable to "force" its tenants to do the same.
 
Jennings is now hesitant to wear D&G clothes at this time. Understandably so, since the brand now stands for 'Dogshit & Garbage' in the eyes of some indignant HongKongers.
 
 
 
 
 
 
 
 


 


 

Source:
Campaign China

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