Image: Versace

Versace is in the midst of major fall out with consumers in China after presenting Hong Kong and Macau as separate from the Republic of China in a new t-shirt. The Milan-based brand was forced to issue a public apology on Sunday after images of a t-shirt pairing cities with their countries – namely, “Macau, Macau” and “Hong Kong, Hong Kong” – were criticized on Chinese social media platforms, and prompted Versace’s China brand ambassador Yang Mi, one of the country’s most well-known actresses, to pull out of her contract with the brand.

Donatella Versace, the brand’s creative director, said in a statement in response to widespread social media protest as tied to the t-shirts, “Never have I wanted to disrespect China’s National Sovereignty and this is why I wanted to personally apologize for such inaccuracy and for any distress that it might have caused.” The brand, which was founded in 1978 by Donatella’s late brother Gianni, revealed that as of July 24, upon discovering the “mistake,” it had stopped selling the t-shirts and destroyed any existing stock.

Versace is one of a few brands that has come under fire recently for failing to recognize Chinese regions as part of the country as a whole. While Hong Kong and Macau are, in fact, part of China, they are designated as “Special Administrative Regions,” meaning that they have the highest degree of autonomy than any other administrative divisions of China, thereby, seemingly leading to confusion, which the Chinese government has been strict in policing.

The same goes for Taiwan, which – while a self-ruled island – is, in fact, officially part of the Republic of China. Chinese supermodel Liu Wen, a brand ambassador for Coach, recently revealed on Chinese social media site Weibo that she has severed her endorsement deal with the New York-based brand over a similar t-shirt, which listed Taiwan as its own country. “I love my motherland, and I steadfastly safeguard China’s sovereignty,” Wen stated in connection with the May 2019 incident with Coach.

Still yet, according to Reuters, “Popular Chinese boy band idol Jackson Yee said on Weibo he had severed ties with LVMH’s Givenchy after pictures of one of the brand’s T-shirts, which also listed Hong Kong and Taiwan in a similar way, received criticism.”

LVMH-owned skincare brand Fresh, sportswear maker Asics, and Calvin Klein “all apologized on their Chinese social media accounts for [utilizing] website designs that recognized China-claimed regions as independent countries,” per Reuters. Their statements come more than a year after Zara was called out by Chinese regulators for incorrectly labelling Taiwan as a “country” on its websites.

In January 2018, the Spanish fast fashion giant was ordered by the Shanghai Cyberspace Authority to remove the “illegal content” from its site – namely, its listing of Taiwan as an independent country for shipping purposes – and make a public apology.

The action by the Chinese government against Zara was characterized at the time as “a fresh show of Beijing’s acute sensitivity about the self-ruled island.” It was not, however, the first time the Chinese officials have lashed out at companies, including publishers of books, maps or other materials, that have labelled the island a country, since Taiwan and Mainland China split in 1949 after a civil war. Nonetheless, the Chinese government claims the island as its territory.

In terms of Hong Kong and Macau, Reuters notes that officials in China “has increased its policing of how foreign firms describe the former European colonies that are now part of China.”

Fashion brands have been subjected to increased scrutiny about their efforts in China, given the extreme importance of the country in the luxury goods market. As Barron’s reported, as of 2018, Chinese consumer spending accounted for one-third of the total $294 billion annual luxury goods market. That number is expected to grow further, according to McKinsey, which reported in April that “China delivered more than half the global growth in luxury spending between 2012–18, and is expected to deliver 65 percent of the world’s additional spending heading into 2025.”

With such spending power in mind, paired with the fact that luxury brands are, in fact, heavily reliant on Chinese consumers in order to continue to boost their bottom lines, product-specific and marketing mishaps pose very real risks for brands, especially as Chinese consumers “become increasingly assertive online when they’re dissatisfied with global brands.”