How Cultural Misunderstandings Can Hurt Your Business

Can any organization nowadays afford to be oblivious to the cultural background of its stakeholders in the global marketplace?

In 2003 Mrs Wang Hui, a Unilever (owner of the Lipton brand) employee interviewed by the South China Morning Post, claimed that Lipton was getting ready for a new challenge: selling green tea bags to customers that at the time were not prepared to accept such novelty.

“Traditionally, Chinese like green tea in the form of leaves and believe that the quality of bags is not good”, she reckoned.

Two years later, former advertising agency J. Walter Thompson (currently in the process of becoming “Wunderman Thompson”) launched a successful advertising campaign that appealed to China’s national identity and values: as shown in the following examples, not only the tea bag was not visible in the pictures, but the tea flowing from the cup formed images resembling key elements of the Chinese culture such as mountains and flowers.

(Images from: https://www.topys.cn/article/870.html)

Fast forward twelve years and China Daily USA confirmed that Unilever keeps expanding in China and “signed agreements with the governments of Guizhou and Anhui provinces to advance sustainable tea development projects”.

At the opposite end of the cultural competence spectrum there’s a campaign released in 2018 by D&G, featuring a Chinese model clumsily attempting to eat oversized Italian food with chopsticks: the ads were met with accusations of promoting negative stereotyping and racism and were labeled by Bloomberg as “the world’s worst advertising gaffe”.

The blunder had disastrous repercussions for the Italian brand:shortly after the unfortunate campaign drew negative attention to the maison, The Economic Times reported at the end of November 2018 that “the scandal could wipe up to 20 per cent off the Dolce&Gabbana brand’s value of USD 937 million, which already places it out of the top 50 global apparel brands”, while according to Drapers the cancellation of the Shanghai show following the backlash costed D&G £22.5m.

Furthermore, the (CNN) claimed that “pages for D&G products on shopping sites operated by Alibaba and JD.com have been taken down, and the brand’s products weren’t showing up in searches on the sites” while (Bloomberg) quoted a spokeperson for e-commerce site Yangmatou claiming that thousands products were taken down and that “the Motherland is more important than anything else”.

Finally, the model featured in the ads claimed that the campaign nearly marked the end of her career: after being targeted together with her family and her agents by member of the public angered at her conduct, she issued a public apology explaining that she understood it was “about representing the national image of China and Chinese culture” and that she felt “guilty and ashamed”. She also vowed to “improve her behaviour” in the future. (BBC)

The campaign went so badly wrong because D&G failed to give proper consideration to their clients’ cultural background: members of a collectivist society are strongly attached to the social group they belong to, to their roots and heritage, to their national identity and they’re ready to raise collectively to defend the values that define their community.

Can any organization nowadays afford to be oblivious to the cultural background of its stakeholders in the global marketplace?

(*article originally written for Biz Dev Dynamics)