Luxury brands in China must take public scrutiny seriously

As high-end brands come under closer scrutiny for the value of seemingly frivolous luxury goods, players need to keep an eye on public opinion.

From Balenciaga’s $1,850 ‘tattered shoes’ to the RMB 11,000 ($1,649) Gucci x Adidas umbrella, expensive but ‘useless’ luxury items have been the subject of an onslaught of criticism and ridicule in China lately, attracting more than 420 million and 140 million views respectively on Weibo, the top microblogging site in China.

Although Gucci quickly changed the product name of its leaky umbrella to “umbrella”, the brand still met with an online storm. Their website stated that “the product is not recommended as an everyday umbrella, but can be used as a daily accessory with good collection value”, but this only fueled public outcry.

Similarly, Balenciaga’s curated narrative for its distressed sneakers, which intends to “show the impacts of fast fashion on the environment,” failed to resonate with its Chinese audience. Many commented, “I could easily get the exact same ones in a trash can for free!”

Luxury brands don’t seem to be taking these bouts of backlash and controversy too seriously.

After all, few online naysayers are brands’ true target audiences, and loyal fans buy for the value rather than the convenience of the products. Still, the turmoil is palpable. Will luxury players continue to thrive in the world’s second-largest market for personal luxury goods if they continue to ignore the scrutiny of its savvy consumers?

There is a general consensus among Chinese shoppers that buying luxury goods is simply to meet the needs of social recognition and status, not functionality. Trivializing practicality while focusing on creating “extraordinary” narratives has been an effective way for luxury brands to cultivate exclusive brand positioning that makes their products all the more coveted.

But in a peer-to-peer corporate culture, ignoring public voices puts brands at risk. The Chinese culture of 面子 (face-saving culture) is highly relevant to luxury players in China, where the purchasing decisions of up to 30% of luxury goods buyers are influenced by public opinion. Therefore, luxury brands need to understand the importance of maintaining a desirable image and avoiding negative ripple effects from audiences outside of their target demographic.

In China, brands are also expected to be more authentic when it comes to creating stories. A common trap that some global luxury brands tend to fall into is adopting a “Western-centric” approach, which may be perceived as superficial by its Chinese audience and could result in strategies that fall flat and fail to resonate.

The latest fallout suffered by Balenciaga and Gucci shows that these big players in the market are now being watched even more by China’s younger generation, who are looking for more value in luxury goods as the market matures. Since public opinion plays a crucial role in the success of companies, brands are driven to listen not only to those who have invested in their products, but also to audiences who have not. These episodes can also sound the alarm for market players to rethink the practicality and affordability of their offerings, or at the very least take a different approach to their product stories.

This is an opinion piece that reflects the views of the author and does not necessarily represent the views of Jing Daily.