How damaging is the Shanghai scandal?
Links:
https://www.nbcnews.com/news/asian-america/dolce-gabbana-fiasco-shows-importance-risks-china-market-n940706
https://edition.cnn.com/2018/11/24/business/dolce-gabbana-china/index.html
http://knowledge.wharton.upenn.edu/article/dolce-gabbana-mistakes-in-china/
https://www.businessoffashion.com/articles/news-analysis/assessing-the-damage-after-the-dolce-gabbana-uproar-racism-china
Please see my post on the Shanghai racial controversy before reading this post. This post is about the affects of the scandal and if the brand will suffer from it.
After the racist campaign was released from Dolce and Gabbana there was many consequences, many retailers were pulling D&G merchandise from their shelves and powerful e-commerce sites deleted them from their websites. There was protests and people burnt their dolce and Gabbana clothes as they joined the boycott for the brand. For Dolce and Gabbana this could be the end of their growth in China, a crucial market for global luxury brands, there is 44 boutiques in china.
"I think it will be impossible over the next couple of years for them to work in China" says Gary Cooper a professor of organisational psychology and health at Manchester University, "When you break this kind of cultural codes, then you are in trouble. The brand is now damaged in China, and I think it will be damaged in China until there is lost memory about it."
London-based finance consultancy estimates that the scandal could wipe up to 2o percent off the Dolce and Gabbana brands value of $937 million, which already places them out of the top 50 apparel brands. They are 36th among all Italian brands.
That could shake Dolce & Gabbana's financial health. The privately held company does not release its individual sales figures. But Chinese consumers are responsible for a third of all luxury spending around the globe, according to a recent study by Bain consultancy. That will grow to 46 percent of forecast sales of an estimated 365 billion euros ($412 billion) by 2025, fueled by millennials and the younger Generation Z set, who will make a growing percentage of their purchases online.
"Without China, the hinterland for growth, D&G will obviously be in a weak competitive position and in danger of being eliminated," the Chinese business magazine New Fortune said in a social media post Sunday. "This is one of the major reasons why D&G finally lowered its head. They really cannot survive without the Chinese market."
Dolce and Gabbana's initial plan was for the Shanghai show to win over the market and push their way into being more successful. However this clearly backfired and instead of winning them over D&G have lost them.
"Change your management practises to hire people who bring that diversity - that really deep understanding of the culture that you cannot gain through a briefing."- Carlos Torelli.
Thomai Serdai said "while social media has magnified the problem the scandal will be forgotten once another one hits the market."
From my research I can see that in existing SWOT analysis' that growth in Asia is seen as a opportunity, I think that although there is still opportunity for growth in Asia I dont think it is as possible now after the recent scandal, in fact I think it may now be a threat to the company that they may loose out on the Chinese and asian market.
https://www.nbcnews.com/news/asian-america/dolce-gabbana-fiasco-shows-importance-risks-china-market-n940706
https://edition.cnn.com/2018/11/24/business/dolce-gabbana-china/index.html
http://knowledge.wharton.upenn.edu/article/dolce-gabbana-mistakes-in-china/
https://www.businessoffashion.com/articles/news-analysis/assessing-the-damage-after-the-dolce-gabbana-uproar-racism-china
Please see my post on the Shanghai racial controversy before reading this post. This post is about the affects of the scandal and if the brand will suffer from it.
"I think it will be impossible over the next couple of years for them to work in China" says Gary Cooper a professor of organisational psychology and health at Manchester University, "When you break this kind of cultural codes, then you are in trouble. The brand is now damaged in China, and I think it will be damaged in China until there is lost memory about it."
London-based finance consultancy estimates that the scandal could wipe up to 2o percent off the Dolce and Gabbana brands value of $937 million, which already places them out of the top 50 apparel brands. They are 36th among all Italian brands.
That could shake Dolce & Gabbana's financial health. The privately held company does not release its individual sales figures. But Chinese consumers are responsible for a third of all luxury spending around the globe, according to a recent study by Bain consultancy. That will grow to 46 percent of forecast sales of an estimated 365 billion euros ($412 billion) by 2025, fueled by millennials and the younger Generation Z set, who will make a growing percentage of their purchases online.
"Without China, the hinterland for growth, D&G will obviously be in a weak competitive position and in danger of being eliminated," the Chinese business magazine New Fortune said in a social media post Sunday. "This is one of the major reasons why D&G finally lowered its head. They really cannot survive without the Chinese market."
Dolce and Gabbana's initial plan was for the Shanghai show to win over the market and push their way into being more successful. However this clearly backfired and instead of winning them over D&G have lost them.
"Change your management practises to hire people who bring that diversity - that really deep understanding of the culture that you cannot gain through a briefing."- Carlos Torelli.
Thomai Serdai said "while social media has magnified the problem the scandal will be forgotten once another one hits the market."
From my research I can see that in existing SWOT analysis' that growth in Asia is seen as a opportunity, I think that although there is still opportunity for growth in Asia I dont think it is as possible now after the recent scandal, in fact I think it may now be a threat to the company that they may loose out on the Chinese and asian market.
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