Photo: milla_ | Flickr
I’ve been following this bizarre case involving a stolen Gucci bag for the past few days. It’s a great combination of unsupported online rumour mongering, accusations of impropriety against a famous foreign brand, and just a whiff of nationalism.For what is essentially a non-story, this is a great one, and if you’re a multinational with a famous brand doing business in China, your reaction to this should be “Thank God it wasn’t me.”
Beijing police have so far opted not to investigate the alleged theft of a Gucci bag because the stolen item “is not expensive enough,” the Beijing News reported May 30.
An internet user posted on their Sina Weibo microblog on May 23 that the manager at a Gucci store inside the Shin Kong Mitsukoshi department store in the capital called the police about a stolen bag. The police wouldn’t take the case as the bag was only worth a few hundred dollars. The netizen complained that the actual cost of the bag is significantly lower than retail price, chiding Gucci for making astronomical profits.
The reason I put “facts” in sneer quotes (hey, I did it again) is that this entire story got started by some guy posting on Sina Weibo (we’ll call him Weibot for brevity’s sake). After Weibot posted his observations, a lot of other folks chimed in, many outraged that Gucci would have the temerity to sell a bag for thousands of RMB whose value was only a few hundred.
The comments are entertaining and some are outlandish. If your Chinese is good enough, check it out here. The story metastasized like cancer, finding its way onto many other online fora. The theories included:
1. The bag was fake (this explains the low value), and the Gucci store was selling it as authentic “Made in Italy” merchandise.
2. The retail store staff that went to the police were inexperienced and gave the cops incorrect price information.
3. The store isn’t really under the control of Gucci at all but a loose cannon licensee (also probably selling fakes).
These are all completely without evidentiary support of course, but apparently the bad press was enough to get Gucci’s PR squad out of bed and onto their typewriters. Well, maybe laptops. And here’s the result (if it isn’t quite legible or if you don’t get images, go to the Sina page and scroll down until you see some English):
Photo: via Sina Weibo
Feel free to disagree, but in my opinion, that’s a really lame press release. That’s not exactly relevant here, but damn. I guess the strategy was to come across as cagey as possible and deny everything except that a bag was stolen. Needless to say, this press release has not won over the hearts and minds here in the Middle Kingdom.
Since my knowledge of the Criminal Law is limited, I’m not going to bother with any sort of legal discussion about the reference price used by the police. We don’t even know, by the way, what the real status of this case is or what sort of pricing information was given to the authorities. I figure that the actual cost of the bag before markup is irrelevant for the purposes of a criminal investigation, but again, I’m no expert on that sort of thing.
What we do know is that Weibot and many of his online compadres think that Gucci is making a ginormous profit here in China, and they are not happy about that at all. There was even a Global Times editorial on the subject:
Prices of luxury goods in China are “too high” and the authorities should take measures to make the prices fairer, experts told the Global Times Thursday, after a stolen Gucci purse was reportedly too cheap to be qualified for filing a case with the police. “Some luxury goods makers set much higher prices in China compared to those in other countries, earning huge profits,”said Cai Sujian, head of the China Luxury Institute, noting that such a situation calls for authorities’ supervision on both product quality and pricing.
There’s that hint of nationalism I mentioned previously, or at least victimization. I don’t know about you, but if prices of luxury goods in China are too high, why are so many filthy rich folks here buying all that crap? Last I heard, Gucci is loving the hell out of China these days, along with all the other luxury brands out there. I’m surprised they haven’t jacked up the prices even more.
China’s Price Law and Unfair Competition Law do prohibit certain kinds of market activities, and China does maintain price controls for certain products. Correct me if I’m wrong here, but I think Gucci can charge an obscene amount of money for a bag if they want to unless the products are shoddy or if the company is misrepresenting something. Whether that markup is 50% or 100% is kind of immaterial, isn’t it?
Look, I’m a guy, so I think anyone who pays thousands of RMB for a bag is a sucker, its production cost notwithstanding. I’m not sure if Weibot et al understand the luxury industry all that well. You take an item that costs X to produce, you slap on a famous brand, and you charge X+an obscene amount. Granted, some luxury products include high quality materials and design work, and these companies will try to convince you that their customers are paying for the “brand experience,” but let’s get real here. At the end of the day, these are some really high profit margins, particularly for those products that are now manufactured here in China.
It’s all about the branding, baby. And I’m not being critical of the industry; it’s a great racket. Too bad some people don’t understand that.
Suffice it to say that I’m not at all sympathetic to the complaints made by Weibot and the rest of the online J’accuse crew. Let’s see some proof next time before throwing around charges like this. Maybe by then, Gucci can hire someone to write a decent press release.
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