Mercedes’ China Syndrome

China Syndrome definition: a hypothetical sequence of events following the meltdown of a nuclear reactor, in which the core melts through its containment structure and deep into the earth. A term the American’s used to imply an accident so bad that hot nuclear material burnt through the centre of the earth and out the other side (to China). It seemed an appropriate metaphor of Mercedes recent marketing debacle.

A seemingly shallow innocuous social media post by Mercedes Benz managed to stir the passions of Chinese netizens. Many of whom broke Chinese law to jump the great firewall to complain on Instagram. A corporate meltdown ensued.

mercedes benz

When one looks at it from a brand marketing point-of-view two questions immediately pop up?

  1. Why were Mercedes doing filler motivational quotes in the first place?
  2. What does Chinese exceptionalism mean for brand marketers around the world?

Motivational quotes

Motivational quotes a tried and trusted tactic for social media marketers. But that doesn’t mean that they are any good. It really depends on what job the post is supposed to fill.

I can’t imagine that it would have driven a lot of sharing (controversy nonwithstanding) or greatly expanded the reach of the Mercedes Instagram account.

Motivational posts can performs really well if you are measured on engagement particularly in markets like the Philippines,Myanmar and Thailand. In the case of Myanmar, brand content serves as entertainment due to an under-developed media industry. Again I don’t know why the team would have been focusing on markets like this?

Where they looking to tap a wider audience and position Mercedes as a brand that one would aspire to own? In developing markets where the urban middle class drive Toyota its a possibility if they were focusing on Mercedes as a luxury brand (S-class, SL-class, GT, GLS and G-class models certainly are).

However those posts would be less likely to appeal to serious car buyers or petrol heads. Mercedes has a rich heritage in car-making and motorsport that it could have drawn upon instead.

I imagine the problem comes down to the way goals were set for the Instagram account. They may have been lacking a clear view of who they wanted their audience to be. I don’t have any insider insight so that’s about the best that I offer.

The Dalai Lama is a divisive figure. The Chinese view him as a ‘separatist’; whilst in the west he is respected as a religious leader and he comes across as an affable old man in media interviews. They view Tibet as an indivisible part of China.

The quote was published within a day of American motor manufacturer Dodge being criticised for using the words of Martin Luther King in an advert. A curious social media operative should have looked at the Dodge debacle and thought ‘what does this mean for my brand’? It doesn’t seem to have occurred and that is on the social media team involved.

Some times it is worthwhile going back to basics:

  • Treat others like you would like to be treated yourself
  • Don’t discuss politics or religion in polite conversation
  • Put three times as much effort into listening, as you do speaking

Chinese exceptionalism

China is an ascendancy, in the same way that a post war-era US saw the rise of US influence around the world. President Xi  echoes Chairman Mao’s China has stood up quote. His power hinges on two things:

  • The legitimacy of the party which is deeply linked to its ability lift Chinese people out of poverty.  From the Deng era onwards China has lifted over 650 million people out of poverty. It’s essentially the Chinese Dream. The ongoing crackdown on corruption in the party is linked to the legitimacy of the Chinese Dream: do what we ask and things will continue to get better in a step-wise manner. You maybe poor at the moment, but your life will continue to improve
  • Chinese nationalism: China going back out and taking its place on the world stage. Prior to the mass production of the industrial revolution; China accounted for roughly one third of the world’s total economic output. It slipped back as the industrial revolution took place in the west. Its current economic growth is seen by the party as China’s journey to regain its place

This means that a constituency of the Chinese population and the party is extremely sensitive to perceived slights, whether they were intentional or not. Chinese sensitivity to the world accelerated since 1999 when the US air force managed to bomb the Chinese embassy in Belgrade by accident.

I don’t think anyone believes that the Mercedes social media team thought about ways that they could offend the Chinese people – on a platform that is unavailable in China. It was negligence rather than malicious in nature.

Timeline

February 5: Mercedes posts a filler motivational post on Instagram with a quote from the Dalai Lama.

Despite Instagram being blocked in China, Chinese netizens became enraged about the post.

February 6: Mercedes apologises on its Weibo account. Chinese netizens are still angry and want the apology to also run on Instagram. Mercedes is between a rock-and-a-hard place. Pissed off Chinese netizens, or pissed off netizens from the rest of the world

February 7:  A Chinese government spokesperson comments on the apology, with a statement that said in diplomatic language that it was prepared to get medieval on Mercedes Benz if necessary

February 7: Senior management in Germany send a letter of apology to the Chinese ambassador in Germany.

February 8: Second apology is reported on Xinhua. Xinhua is the Chinese government’s wire service think AFP or Reuters.

February 9: People’s Daily – a government newspaper often considered a herald for the Party describes Mercedes as an ‘enemy of the Chinese people’

February 13: Mercedes-Benz (China) Automotive Sales Co. will recall 1,886 imported S-class, C-class and GLC sport utility vehicles (SUVs) manufactured between July 2016 and December 2016, according to the statement. Its joint venture company Beijing Benz Automotive Co. will recall 18,893 C-class and GLC SUVs manufactured between October 2016 and February 2017. These recalls don’t seem to be mirrored in other countries, which is unusual for the 1,886 imported models – it might be a coincidence…

The constituency

The main critics of Mercedes seem to be particular faction of it young people with extreme nationalist tendencies called 愤青 fenqing (said fen-ching).

They are a diverse group in terms of beliefs, but a simple view would be to think of the nationalism of Britain First supporters, but with Chinese sensibilities. They tend to come from lower tier cities and will have been less exposed to world beyond China.

Their antics are curbed through censorship and further actions when it suits the Chinese government. It is rarely desirable to allow the fenqing enough space to run unchecked.

When China was unhappy with South Korea; it chose not to curb protests and damage against Korean business Lotte by fenqing. Lotte owns the golf course on which the THAAD anti-ballastic missile system was placed to stop a North Korean nuclear attack on the South.  Chinese demonstrators closed Lotte stores throughout China, cause a huge amount of damage and forced Lotte to withdraw completely from the Chinese market. Those stores that weren’t picketed by protesters were closed down by Chinese local government department for (non-existent) fire code violations and fined over breached in advertising regulations. Chinese tourists boycotted Korea and Korean stores.

They will have been supplemented by students living outside China whilst attending foreign universities.

Context

One has to consider Mercedes faux pas in context. It came on the back of apologies by Delta Airlines, Zara and Marriott Hotels when netizens realised that Taiwan and Hong Kong were treated as different countries on these websites.

In Marriott’s case it was an loyalty programme research survey that caused the controversy.

Posts like this one on Instagram have the comments section stuffed full of protests from overseas Chinese and their mainland brethren who have jumped the great firewall.

The government forced Marriott to close its site and app in China. In addition Marriott’s social channel went dark AND the company made an apology aimed at a global audience.

Their western social channels went dark for four days to a week depending on the channel. The implication in an article in China Daily the Chinese government ordered a shutdown GLOBALLY on Marriott’s social channels as part of the punishment.

“To regain confidence and trust, the first thing is to admit the mistake, then fix it, and it would come back slowly as we prove we really mean what we say,” Smith told China Daily in Shanghai on Wednesday, one day before the company’s digital platforms are scheduled to be back online.

What is conveniently forgotten is that the international websites of Chinese state-owned companies like Air China made similar mistakes.

Why did Mercedes apologise?

Chinese netizens weren’t going anywhere. They are angry and persistent.

Implicit government pressure, here is a quote from a Chinese government press conference about it

Q: According to reports, on Monday, Mercedes-Benz quoted the Dalai Lama in an English language post on Instagram. Yesterday, the company apologized and deleted the post. Was this at the behest of the Chinese authorities?

A: I have seen relevant reports. To acknowledge your wrong and fix it is the simplest truth, universally accepted both in China and in other countries.

I want to stress that over the forty-year course of reform and opening-up, the all-around cooperation between China and foreign enterprises has not only boosted China’s development, but also benefited the latter. As the 19th CPC Congress ushered in a new era for China’s endeavors in various causes, a China in the new era will be more open and more confident. We will continue to pursue cooperation with foreign companies, and we are also ready to share China’s development opportunities with them. However, it is needless to say that they must observe some basic rules.

That’s diplomatic language for expect a beasting from the Chinese government and Chinese people for any perceived slights.

Mercedes-Benz probably looked around at what its peers with major exposure to the Chinese market have done. Marriott being the most obvious analogue. Marriott’s capitulation to the Chinese government was complete and global – even at the risk of provoking the ire of Donald Trump supporting Americans. They were one Donald Trump tweet away from American First outrage over their capitulation to China, but it was a risk that they were prepared to take.

It is worthwhile remembering that Boeing had a billion dollars wiped off its market value thanks to Donald Trump complaining on Twitter about the price of a new Air Force One plane. He has also shown an ability to mobilise his political base via social media.

Conclusion

The takeaway for many brand marketers in multinational firms, regardless of where in the world that they work is that they are the Chinese government’s pawn and they best get used to it. Chinese buying power has given the Chinese government the kind of exceptionalism that was previously only available to the US; then mostly because that was were many multinational companies were headquartered.

One has to wonder how long western brands will survive by bending to the will of the Chinese government when it wants its homegrown brands to expand globally?

Contrast Marriott and Mercedes’ behaviour with the rage-filled tone Huawei takes, particularly  in the US in the face of government criticism or negative partner actions.

More information
Use of Martin Luther King Jr. speech in advertisement causes controversy at Super Bowl | The Independent
China inflicted a world of pain on South Korea in 2017 | Quartz
China asked Marriott to shut down its website. The company complied | Washington Post
Statement from Arne Sorenson, President and CEO, Marriott International, Inc.
Marriott announces ‘rectification plan’ to regain trust | China Daily
Doing business in China: Politics is still in command | HKEJ Insight
Foreign Ministry Spokesperson Geng Shuang’s Regular Press Conference on February 7, 2018 – Chinese Ministry of Foreign Affairs
Daimler apologizes to China for quoting Dalai Lama | Xinhua News
Mercedes-Benz to recall 20,779 cars in China | Xinhua
Donald Trump just took a shot at Boeing in Trump Tower | CNBC
Huawei fed up, tells US critics ‘shut up’ | ZDNet
The CEO of Huawei Totally Went Off Script at CES and Ripped U.S. Carriers After an AT&T Deal Fell Apart | Entrepreneur

Instagram: we need to talk about fakes

I’ve noticed these kind of accounts popping up on Instagram over the past few months.

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Interesting shots probably re-grammed from the brands marketing materials or a magazine shoot. Going through to the site….

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Great site design. Only the URL and the prices give it away as fake goods. For those who aren’t as sophisticated Facebook now has its classifieds section. Think Gumtree but inside Facebook.

Here’s a second example, this time replicas of BAPE’s iconic shark head hooded top.

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This time they are selling the products through Amazon merchants accounts

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Instagram has a lot of heat from brands, but this could turn very quickly when they realise that Instagram can be a facilitator of fake products sales. Look at how Alibaba and eBay have been vilified in the past.

Charlie Stross at the Chaos Computer Club conference

Interesting lens on history, predictions and futurology by science fiction writer Charlie Stross. Culture has a role (and attendant responsibility) in shaping the direction of technology. Stross’ talk is an essay on unintended consequences, design, regulation and economics.

ICYMI | 万一你错过了| 당신이 그것을 놓친 경우

China’s Guangzhou Tengshi secures further funding to expand automated convenience stores | South China Morning Post – interesting store concept that turns the retail space into a giant vending machine

Germany accuses China of using LinkedIn to recruit informants-Sino-US – not terribly surprising

brandchannel: Unboxing Boxed: 5 Questions With CMO Jackson Jeyanayagam  – good to see this write-up with fellow WE veteran Jackson

How brands secretly buy their way into Forbes, Fast Company, and HuffPost stories | The Outline – this looks far more corrosive for the PR industry than Bell Pottinger

CryptoCurrency Screener – Yahoo Finance – it gives you an idea how mainstream cryptocurrency speculation has become

Qualcomm’s Anti-Competitive Conduct Could Be Exacerbated By Mergers | Disruptive Competition Project – interesting analysis

Twitter Users Like Long Tweets More Than Short Ones | Buzzfeed – impressive if true

California fires: Navigation apps like Waze sent commuters into flames, drivers say | USA Today – this will damage Waze in California.

3D printed Wi-Fi – still getting my head around this (PDF) via our Matt

Bill Brewster Recalls His NYC Stint Living (and Record Collecting) in the ’90s – via our Jed

Cathay Pacific reuses uniforms to create sustainable red envelopes for Chinese New Year | The Drum – I really like this idea, although it might jar with job and pay cuts at Cathay Pacific

You are not safe

IBM 360 Announcement center

I have been catching up on Halt and Catch Fire. It is a fiction based on various aspects of Silicon Valley lore. I have enjoyed watching it immensely to a point.

I was especially struck by  episode eight in the third series. One of the main characters in series three hacks his employer and releases their anti-virus software online for free. But its the mid-1980s through a thoroughly modern lens. It resonates because it speaks to our age, not to the 1980s or even the mid-1990s.

YOU ARE NOT SAFE

I, Ryan Ray, released the MacMillan Utility source code. I acted alone. No one helped me, and no one told me to do it.  I did this because ‘security’ is a myth.  Contrary to what you might have heard, my friends, you are not safe.  Contrary to what you might have heard, my friends, you are not safe.  Safety is a story. It’s something we search our children so they can sleep at night, but we know it’s not real.

Yes, there was software piracy, it was a mainstream part of computing culture which had sprung up from the ‘homebrew’ mentality.  Prior to founding Apple, Steve Wozniak used to give out the schematics of what then became the Apple I. Punched paper tapes of software used to be exchanged between members when they met up in aMenlo Park garage and later on in an auditorium at Stanford University.

Back then the narrative was overwhelmingly positive in terms of technology. The main problem was whether the Japanese, Microsoft, Intel or IBM was going to crush the rest of the technology eco-system in Silicon Valley. Consumers  had a bright new world of technology ahead of them.  Video games were still a niche interest compared to VCRs (video cassette recorders). VHS versus Betamax was as important a format war as Windows versus Macintosh.

Here’s the thing. This show (rightly or wrongly) may frame the way a lot of people think about this part of the digital age. For those who aren’t well read about the history of Silicon Valley OR didn’t live through the 1980s – it will colour their view of history. That detail rankled me a bit; I’m not quite sure why.  Part of it is knowing where we’re going is understanding where we have been in past.

That’s all very nice, but why does this matter? It provides you with perspective and the ability to critique ideas.