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Mercedes’ China Syndrome

Reading Time: 8 minutes

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.


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.


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.


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

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Out and about: Blade Runner 2049

Reading Time: 2 minutes

*** No plot spoilers*** Where do you start when talking about Blade Runner 2049 – the most hyped film of the year?

Blade Runner 2049 starts up some 20 years after the original film. It captures the visuals of the original film, moving it onwards.  The plot has a series of recursive sweeps that tightly knit both films together which at times feels a little forced, a bit like the devices used to join Jeremy Renner’s Bourne Legacy to the Matt Damon canon.

Blade Runner 2049

The 1982 film took the neon, rain and high density living of Hong Kong in the late summer and packaged it up for a western audience.  Ever since I first saw  it represented a darker, but more colourful future. I felt inspired, ready to embrace the future warts and all after seeing it for the first time.

The new film is a darker greyer vision largely devoid of hope. You still see the Pan Am and Atari buildings of the first film, now joined with brands like Diageo. The police cars are now made by Peugeot. It also captures the visual language of the book, something that Scott hadn’t done in the original to the same extent. In the book, Dick (and the Dekkard character) obsess on how the depopulated world’s crumbling ephemera is rapidly becoming dust.

Visually the film dials down its influences from Hong Kong, Tokyo or Singapore and instead borrows from the crumbling industrial relics of the west and third world scrap driven scavenging from e-waste in China and Ghana to the ship breaking yards of Bangladesh. The filthy smog and snow is like a lurid tabloid exposé of northern China’s choking pollution during the winter. It paints a vision more in tune with today. Automation and technology have disrupted society, but orphans are still exploited for unskilled labour and vice is rampant.

Ryan Gosling and Harrison Ford do very capable performances. And they are supported by a great ensemble of cast members of great character actors at the top of their game. Dave Bautista, Robin Wright, Barkhad Abdi (Eye in The Sky) and David Dastmalchian (MacGyver, Antman, and The Dark Knight). The one let down is Jared Leto – who now seems to play the same character in every film since his career high point of Dallas Buyer’s Club – I suspect that this is as much a problem with casting as performance. I think he needs to be cast against type more.

For a three-hour film it still manages to hold your attention and draw you in to its universe without feeling tired. It’s also a film that forces you to think, so if you are looking for visual wallpaper for the mind a la Marvel’s Avengers series of films it won’t be for you.



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Apple Special Event – key outtakes

Reading Time: 3 minutes
Key takeouts from the Apple special event with a little bit of analysis
First presentation by Angela Ahrendts. There is a question of why she hadn’t presented at previous keynotes.  My read on it is that that the revenue per square foot metric beloved of retail analysts will tumble. Apple seems to be taking the mall companies idea of shopping as entertainment and doing it for their individual stores.
Town hall – what they call the stores internally, bigger focus on engagement rather than transactions – is this an effort to try and recapture cool?
Store features
    • Plaza – public private spaces outside the store if possible, interesting implications on future store placements – probably less in malls
    • Forum – open plan internal space
    • Boardroom – private space focused on developer relations, was probably the most interesting push. Stores are being given a stronger push as embassies for developer relations. 
    • Creative Pro – Apple genius for the creative apps, probable mix of amateur and professional audiences addressed
    • Today at Apple – driven by Creative Pro staff to focus on creating more usuage of key offerings i.e. photo walks – think Nike Running Club. Also includes teacher outreach
    • Genius grove – the genius bar but with plants presumably to try and break up the overall store noise
  • Avenues  – wider aisles that products are on
Continued retail expansion in the US including Chicago – interesting that international expansion wasn’t mentioned. 
Apple Watch
    • 50% yearly growth – the series 2 fixed many of the hygiene factors wrong with the first version
  • 97% customer satisfaction – health seems to be driving this
Health features: focus on heart rate monitor and getting proactive about flagging elevated heart rate. Also focusing on heart rhythm changes as well.
watchOS 4 out September 19 available to all customers. Interesting that they didn’t drill into some of interesting features on watchOS 4 using Siri
Series 3 Apple Watch with cellular built in. Your Dick Tracy fantasies are alive. Apple thinks that people will leave their phones at home and bring their Apple Watch. They also see it as killing the iPod Nano with wireless music playback. I am yet to be convinced.
Apple added a barometric sensor; usage example was focused on health and fitness rather then locative apps. Not a great surprise given that these sensors have been in premium G-Shocks for a good while. 
Apple used specially designed lower power wifi and Bluetooth silicon. But no news about who is making the cellular modem. The SIM is embedded on the motherboard and presumably a software update? These changes could have interesting implications for future phones?
Interesting carrier partnerships, in particular all three of China’s mobile carriers, but only EE in the UK?
Apple TV
    • Apple TV now supports 4K, unsurprising hardware upgrade and includes high dynamic range – Apple is following the TV set industry’s lead
    • More interesting is the amount of content deals Apple has done with studios, in particular keeping the price point of 4K HDR content the same as was previously charged for HD content.
    • Interesting TV partnerships but no major UK TV stations only Mubi
    • Emphasis on easy access to sports on the Apple TV would wind up cable companies further
  • Apple TV was also positioned as the control interface for HomeKit smarthome products. There was no further  update on HomeKit in the presentation 
iPhone 8 incremental changes
    • Wireless charging with glass back. The steel and copper reinforcement of the glass is probably to help with the induction charging
  • Incremental improvements in picture quality. Bigger focus on AR including new sensors.
iPhone X
    • Positioned as future direction for iPhones. Biometric face ID is clever but has issues. I wonder how it will work with facial hair or weight gain – Apple claims that it will adapt. Apple also claims to be able to detect photos and masks. It’s also used for face tracking in AR applications with some SnapChat lens demos.
    • As with Touch ID, there is a PIN code if your face doesn’t work. I have found that Touch ID doesn’t work all the time so you need that PIN back up.
    • The notch at the top poses some UX / design issues and the industrial design implies case free usage which will be a step away from usual iPhone usage.
  • What isn’t immediately apparent to me is the user case for the iPhone X versus the iPhone 8 plus?
What was lacking in the iPhone presentation was a celebration of all in the changes in iOS 11 under the hood.
A11 – Bionic chip in the iPhone 8 and X
    • Includes new integrated GPU for machine learning and graphics. This explains why Imagination Technologies are in trouble
  • New image sensor processingThe A11 processor has a hardware neural network on the chip for the iPhone X – unsure if its also usable on the 8
Apple’s moves to embrace, co-opt Qi wireless charging and build a super-standard on top of it will likely wind up members like Qualcomm and Huawei. How much of this is down to user experience and how much is down to the desire to get Apple IP in the technology stack?
Apple is left with a large product line of iPhones: SE, 6 series, 7 series, 8 series and the X