This document analyzes 109 crises affecting 97 brands over the past decade in China. The analysis finds that the frequency of incidents has grown exponentially in recent years. Most incidents involved foreign brands and originated from geographic inaccuracies or cultural misunderstandings. Politics and historical issues caused the most severe impacts, often leading to brands being banned or forced to take drastic actions. The research advises brands to educate global teams about Chinese culture, implement approval processes, and monitor social media for early alerts to controversies.

1. 10 Years
of Brand Crisis
& Controversies
in China
Nov 2019
Research by
negative public reaction
very negative impression of the brand
Banned
Blocked
Cancelled
reprimanded & disciplined
inadvertent errorsincerely apologise
permanently shut down

2. 10 Years of Brand Crisis in China 2
This year has witnessed more companies in crisis. With many
missteps inadvertent, foreign brands are nervous and unsure
how to act. We analyse the past decade's key incidents affecting
companies operating in China and identify the common pitfalls.
Methodology
We read hundreds of news articles from more than 30 news sources and found 109 crises
affecting 97 brands & individuals from all over the world.
Our team meticulously categorised the controversies by industry, year, country of origin,
impact and incident type. Finally we analysed the data to look for patterns and insights to help
us offer clear advice on how to stay out of trouble in this important market.
As part of our research we created this scale to categorise the impact:
In recent years China has been aggressive in calling attention to brands not living up to their
promises, particularly through the March 15 gala of 'World Consumer Rights Day’. However
for the purpose of this report we have decided not to include product or service related PR
crisis and focus on incidents more specific to China.
30+
News Sources
97
Brands
109
Incidents
16
Industries
💰 Brand positively impacted by the incident.
💩 Minor incident with little or no adverse outcome.
💩 💩 Brand resolved the issue without external pressure.
💩 💩 💩 Brand widely criticized & notable public backlash.
💩 💩 💩 💩
Suffered notable losses e.g. losing a brand ambassador or product
temporarily blocked from online platforms.
💩 💩 💩 💩 💩
Brand either banned from China or forced to take drastic action
e.g. cancelling an event or re-directing a flight.

3. 10 Years of Brand Crisis in China 3
The goal of this report was not to embarrass any specific brands
or individuals. We have tried to stay neutral in our analysis and
just focus on identifying patterns and to help you learn from the
past mistakes of others.
Our research was only possible thanks to the reporting of over
30 news organisations including:

4. 4
Frequency of Incidents Over Time
0
10
20
30
40
50
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
41
30
99
5
411211
The number of incidents has grown exponentially in recent years and we expect this
trend to continue into the next decade.
As the internet has exploded in China the government has tried to introduce
regulations, most notably the ‘China Cybersecurity law', introduced in June 2017.
10 Years of Brand Crisis in China
1 1 2 1 1

5. 5
Brands Impacted by Country of Origin
Unsurprisingly because there are more brands from North America and Europe that
have entered the Chinese market we also see more incidents. It’s impossible to rule
out the impact of rising global trade tensions especially with China’s long time rival the
U.S.A. However foreign brands are not necessarily being unfairly targeted, brands
originating in China are also not immune to controversy.
10 Years of Brand Crisis in China
0
35
10
3
45
0
16
Countries with the highest frequency of incidents
U.S.A. China FranceJapan
& U.K.
Germany
& Italy
42 incidents 11 incidents 7 incidents8 incidents 6 incidents

6. 6
Incidents Segmented by Type
15%
20%
11%
9%
11%
34%
Aside from the more obvious ones, there are a broad range of issues that can trigger a
crisis and the threat of public outrage via social media can be just as dangerous as
government pressure.
Recently foreign brands have been most susceptible to controversies related to
Geographic Sovereignty with the majority of these being accidental.
Chinese brands are more likely to be accused of degrading the morals of society and
should stay far away from politics.
10 Years of Brand Crisis in China
Negative Impact on Society
Miss-translation or
Cultural Misunderstanding
Racism
Politics
Geographic Sovereignty
Incorrectly describing or depicting
regions of China.
Historical Sensitivity
Chinese Brand
Foreign Brands 16%
7%
15%
53%
12%
7%
11%7%
33%
39%

7. 7
Where Incidents Originated
Despite all the crisis we studied for this
report directly involving mainland China,
many of them originated outside of the
country either on Western social media
or products sold in other markets.
Brands have to be increasingly careful
that their global presence doesn’t cause
offence in China.
10 Years of Brand Crisis in China
Unclear
4%
Greater China
62%
Overseas
35%

8. 8
Severity of Impact
In China there is almost no truth in the old saying “All publicity is good publicity”. Of
the news articles we analysed only 1 Chinese company seemed to have a clear
positive outcome with sales increasing dramatically as a result of their crisis. Our
advice is to avoid controversy whenever possible.
Because this report focuses on articles in the media, the graph is likely more skewed
towards incidents that had greater impact on the brand and so received more
coverage.
10 Years of Brand Crisis in China
💰
💩
💩 💩
💩 💩 💩
💩 💩 💩 💩
💩 💩 💩 💩 💩
0 10 20 30 40
26
22
41
14
3
1💰 1

9. 9
Severity of Impact by Type
Although issues related to geographic
sovereignty are more common they are also
usually easier and less controversial to fix and
so their impact is less severe. Cultural
misunderstandings are also quite easily
forgiven. This graph shows that brands should
steer well clear of politics and particularly
historical references as these cause the most
disruption.
10 Years of Brand Crisis in China
💩
💩 💩
💩 💩 💩
💩 💩 💩 💩
💩 💩 💩 💩 💩
0 10 20 30 40
Negative Impact on Society
Cultural Misunderstanding
Racism
Politics
Geographic Sovereignty
Historical Sensitivity

10. 10
Incidents by Industry
Automotive
Celebrities
Cosmetics
E-commerce
Education
Electronics
Entertainment
Fashion & Luxury
FMCG
Media
Medical
Other
Restaurants
Sport
Tech
Travel & Tourism
0 10 20 30
Luxury brands are by far the most likely to land
in trouble, often with consumers leading the
online backlash. Celebrities are idolised in
China and maybe as a result the government
holds them to a high moral standard. Travel
brands more easily get in Geographic
confusions, but as we saw previously these are
often easily resolved with the odd exception
where flights are re-routed mid-air.
10 Years of Brand Crisis in China
Negative Impact on Society
Cultural Misunderstanding
Racism
Politics
Geographic Sovereignty
Historical Sensitivity

11. 11
How Brands Respond
0
10
20
30
40
50
Apologised Denied Stood Firm Capitulated No Comment Unknown
6
9
28
15
7
44
From our analysis there was no obvious correlation between the response and the
impact on the brand. In recent years fewer foreign brands have stood firm with many
choosing to capitulate possibly to ensure they retain their presence in the Chinese
market.
10 Years of Brand Crisis in China
Chinese Brand
Foreign Brands
Apologised Capitulated Denied No Comment Stood Firm Unknown

12. 12
Advice for Brands
Follow KAWO on
WeChat to stay
in the loop.
1. Global Education
News can spread quickly around the world. Ensure you educate your
global team about Chinese geography, history and cultural habits.
Find a professional communications agency to help you:
kawo.com/directory
2. Better Process
Implement transparent communication and efficient approval
processes within your marketing teams. Consider using a software
platform, like KAWO, with multistep approval, screening for sensitive
words & audit trails.
3. Brand Monitoring
Ensure you receive automatic alerts when your brand is mentioned
online. Social media can be a particular flash point so consider buying
a social listening platform to help your marketing team to better
manage your online reputation.
10 Years of Brand Crisis in China
For further information contact marketing@kawo.com.

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