Kaiser Kuo: "Brands should be more cautious in China"

Kaiser Kuo’s "Sinica Podcast" is the leading English language podcast on current issues in the People's Republic. In this preliminary interview for the 16th European Trend Day, the expert talks about consumption and boycott in the People's Republic.

Kaiser Kuo

Lately, several Western companies, many of them fashion brands, have been accused of having hurt the feelings of Chinese people. Were the subsequent boycotts a form of consumer activism?

One could certainly see these things as a form of consumer activism, motivated by a set of political sensitivities that are often unfamiliar or even incomprehensible to Europeans or North Americans, and which are frequently dismissed as illegitimate or unwarranted even when they are recognized. This is understandable, to some extent, given the heavy hand that the state or state-controlled media seems to have in fanning the flames of nationalist anger.

On a more general level, where do you see consumer activism in China?

There’s a natural tendency in the West to notice Chinese consumer activism primarily when it’s connected with politics, and we’ve all seen many examples of this recently. But activism is actually quite commonplace, and Chinese companies and savvy foreign brands operating in China are familiar with the challenges it can pose. Often it’s organic, arising from issues like data leaks or privacy violations, shoddy quality, misleading advertising and the like, but it can also be created by or at least leveraged and amplified by competitors, who will seize on a rival company’s missteps to do reputational damage. Companies are especially careful in the lead-up to Consumer Day – March 15 – when national media will single out individual companies and go after them for alleged violations.

How are such movements different from the ones outside the PRC?

My sense is that they’re quite similar for the most part, but simply more intense in every regard: the potential for virality is more intense because of the tightly-interconnected Chinese social media space, the scale is greater because of the sheer size of the Chinese market, the political pitfalls pose greater risks because of their potential for state-led amplification, and the likelihood that a misstep will be exploited by competitors is greater because of the ferocious competition of the Chinese marketplace.

Experts tell us that today, consumers expect brands to take a stand on political issues. In your opinion, what does this mean when doing business with China?

I think that advice is fine if you’re talking about, say, a U.S. or E.U. context. While there might be a few relatively safe and uncontroversial stands a brand might take on particular issues – broad support, say, for feminism, or for environmental protection, or preservation of endangered species – on almost any other issue I would urge brands to tread a bit more lightly when it comes to China unless they’re willing to accept the inevitable consequences.

What other recommendations do you have for multinational companies who want to operate in the Chinese market?

Have a clear idea of what your approach will be when it comes to conflicting values between home country sensibilities and the sensibilities of Chinese consumers. You may well choose to uphold home country values when forced into a position where a choice is necessary, but be prepared – and ensure that stakeholders are all prepared – to accept the consequences of a notional “principled stand”. If you decide that it’s in your brand’s interest to operate in China, then make sure you have local staff who are highly attuned to the political and cultural idiosyncrasies of the landscape, who are able to identify potential pitfalls and empowered to steer your brand clear of those pitfalls.