Canadian sportswear brand Lululemon has reported that its revenue fell 5% year-on-year basis to $2.42 billion, and net income declined 11.3% to $329 million. The company’s top management attributed the losses in a large part to the backlash received after a social media campaign with yoga practitioners on the Great Wall featured a ceremonial drum social media users claimed was Japanese.
Lululemon had previously cited China as its largest growth market, and the sharp reversal following the apparent faux pas highlights the fragility of the Chinese market for foreign brands. It is hard to imagine that in many other countries around the world, a marketing campaign could have such an impact.
Despite the sensitivities, and increasingly blurred boundaries of what is or is not acceptable, China is still too big a market for brands around the world to ignore. Many of the world’s biggest brands have been accused of “hurting the feelings of the Chinese people” at one point or another—it seems to be part and parcel of doing business in China.