Swiss watchmaker Swatch recently found itself in hot water over an ad campaign that featured an Asian male model creating a “slanted eye” pose. The backlash was swift and robust, particularly on social media platforms in China, where many interpreted the images as racist.
In response to the uproar, Swatch issued a formal apology on Weibo, acknowledging the concerns and stating that they had pulled the controversial ads from circulation worldwide. They expressed regret for any distress caused and emphasized their commitment to understanding and addressing misunderstandings. This apology also appeared on their Instagram account.
The situation has negatively affected Swatch’s stock, which dropped as much as 2.7% in early trading. Despite rebounding slightly, the company’s shares have struggled significantly in 2023, reflecting broader challenges. Since the beginning of the year, Swatch’s stock value has fallen by over 50%, partly due to tough market conditions and a hefty 39% tariff on exports to the United States.
Young Chinese students, like 23-year-old Justin Zhao, expressed surprise at the mishap, noting Swatch’s long-standing presence in the Chinese market. Zhao questioned how such ads made it through various approval stages.
Peter Xu, a popular fashion influencer with seven million followers on Weibo, commented that while the controversy may influence Swatch’s business negatively in the short term, the quick apology could help mitigate long-term damage. He called the choice to use such imagery “pretty stupid.”
Financially, Swatch has faced a downturn, with 2024 revenue dropping 14.6% to 6.74 billion Swiss francs (about $8.4 billion). This decline reflects weaker consumer demand in China and broader economic challenges affecting luxury goods. In 2022, China, Hong Kong, and Macau accounted for 27% of Swatch’s total sales.
This incident raises important questions about cultural sensitivity in advertising, especially in markets with diverse populations. As brands continue to navigate global markets, understanding local perspectives and potential pitfalls is crucial for maintaining customer trust and brand integrity.
For more insights on cultural sensitivity in advertising, you can check resources provided by the American Marketing Association here.
