China's online army takes global firms to task over Hong Kong

A Swarovski store in Beijing. The company apologised on Tuesday for "hurting the feelings" of the Chinese after calling Hong Kong a separate country on its website.
A Swarovski store in Beijing. The company apologised on Tuesday for "hurting the feelings" of the Chinese after calling Hong Kong a separate country on its website.PHOTO: EPA-EFE

BEIJING • China's most powerful weapon as geopolitical storm clouds gather may not be tariffs or riot police, but ordinary consumers at their keyboards.

Beijing is increasingly finding itself under siege as United States President Donald Trump's trade war squeezes the world's second-largest economy and protests in Hong Kong call into question its hold over the territory. But, as it has in the past, China is finding support from an increasingly nationalistic online community, who uses the pitfalls of multinational companies to drive home its point.

A growing list of global brands, from Versace to Calvin Klein to Swarovski, has been forced to apologise in recent days after an army of Chinese Internet users called them out for products and company websites that identified Hong Kong as a country, not as a city.

Chinese consumers have proved a potent force in pushing change on local issues, such as tainted milk and substandard vaccines. But that same outrage can be just as powerful when applied to politics, with critical coverage in state-controlled media spurring Internet users to call for boycotts on the country's social media platforms.

"There is a nationalist response on the Internet that obviously the government stokes," said Mr Andrew Polk, co-founder and partner of Beijing-based consultancy Trivium China. "It goes from official state media, and then takes on a life of its own."

Global firms, which are increasingly counting on China's wealthy middle class and burgeoning consumer market for growth, have learnt the hard way that it pays to make amends - and fast. Chinese buyers account for at least a third of luxury sales and two-thirds of the industry's growth, according to estimates from consultancy Bain & Co.

Even companies that do not sell directly to consumers are not immune from social media outrage.

PricewaterhouseCoopers (PwC) found itself a target after an online post, which appeared to be from the accounting firm, urged support for the Hong Kong protests. While PwC issued a statement calling the original post a fraud, it did not mollify critics on Chinese social media platforms, according to state-run tabloid Global Times, which said the firm's response "sparked widespread dissatisfaction among the public" because it did not strongly condemn the demonstrations.

 
 
 

Hong Kong may be the hot-button issue now, but there are many other topics that can set off nationalist anger online. Chinese social media users expressed indignation in June after a UBS Group economist used the phrase "Chinese pig" in a report on the impact of China's swine flu outbreak. The Swiss bank apologised publicly.

Companies are also at risk as the US-China trade war intensifies, said Mr Julian Evans-Pritchard, Singapore-based senior economist for China with Capital Economics Asia. "I do think life is going to become more difficult for foreign firms in China, particularly US firms."

Versace, owned by US-listed Capri Holdings, apologised on Sunday and removed an offending T-shirt that did not properly identify Hong Kong and Macau, both former European colonies that are now special administrative regions of China.

Coach, owned by New York-based Tapestry, issued an apology on Monday. So did LVMH-owned Givenchy. Both had been selling products that did not list Hong Kong and Taiwan as parts of China.

Swarovski apologised on Tuesday for "hurting the feelings" of the Chinese after calling Hong Kong a separate country on its website. It lost the support of its brand ambassador, Chinese actress Jiang Shuying, as the row deepened.

BLOOMBERG, AGENCE FRANCE-PRESSE

 
A version of this article appeared in the print edition of The Straits Times on August 15, 2019, with the headline 'China's online army takes global firms to task over Hong Kong'. Print Edition | Subscribe