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Tag: backlash

  • Starbucks Korea Hit Hard by Backlash over Controversial Marketing Campaign

    Starbucks Korea Hit Hard by Backlash over Controversial Marketing Campaign

    In the second quarter, Starbucks Korea’s operator, SCK Company, suffered an operating loss due to a decrease in sales. This followed negative reactions to an ill-received marketing campaign and the suspension of its high-profile summer promotion.

    The operating loss for the second quarter amounted to 18.4 billion won (US$13.4 million), in contrast to the 40.3 billion won operating profit registered in the same period the previous year and the 29.3 billion won profit of the preceding quarter.

    The summer promotional campaign, regularly held in June by SCK, the Starbucks Korea operator, was conspicuously absent this year. This decision was confirmed during an earnings announcement made by E-Mart, SCK’s parent company.

    In a related incident in May, Starbucks Korea came under fire for their ‘Tank Day’ tumbler campaign, which coincided with May 18, triggering criticism for its inappropriate reference to the 1980 Gwangju pro-democracy uprising. In response to the public outcry, Starbucks Korea suspended the campaign and issued an apology.

    As a result of the controversy, the Shinsegae Group, the parent company of Starbucks Korea, dismissed the head of Starbucks Korea. Following this, the group reported a “very significant” drop in sales. They further addressed the issue by implementing historical awareness and social sensitivity training for their staff.

    Despite these events, E-Mart did not directly attribute the controversy or the subsequent calls for a boycott as the immediate cause for the decline experienced in the quarter.

    Questions & Answers

    What was the operating loss of Starbucks Korea’s operator, SCK Company, in the second quarter?
    The operating loss of SCK Company in the second quarter was 18.4 billion won (US$13.4 million).

    What was the controversy regarding Starbucks Korea’s marketing campaign?
    The ‘Tank Day’ tumbler campaign by Starbucks Korea faced criticism for its inappropriate reference to the 1980 Gwangju pro-democracy uprising, leading to public outcry and a subsequent boycott.

    How did the parent company of Starbucks Korea respond to the controversy?
    The Shinsegae Group, the parent company of Starbucks Korea, dismissed the head of Starbucks Korea following the controversy. They also reported a significant drop in sales and initiated historical awareness and social sensitivity training for their staff.

  • Shein’s Landmark French Expansion: A Shift In Strategy Or Threat To Local Retailers?

    Shein’s Landmark French Expansion: A Shift In Strategy Or Threat To Local Retailers?

    Online rapid-fashion retailer Shein is set to establish its first ever permanent brick-and-mortar stores in France this November. This significant move has been facilitated through a partnership with department store owner, Société des Grands Magasins (SGM), and has been met with criticism from French retailers.

    Shein’s New Brick-and-Mortar Ventures

    The new Shein outlets will be “shop-in-shops” located in the BHV department store in central Paris and in Galeries Lafayette department stores across five provincial cities. This represents a fresh direction for the retailer, which has so far only ever held transient pop-up stores worldwide, primarily for marketing purposes.

    SGM’s president, Frédéric Merlin, expressed that the introduction of Shein’s outlets would invite a younger demographic to their department stores. He went on to suggest that the same customer may well indulge in a Shein product and a designer handbag during the same shopping trip.

    Controversy Surrounding Shein’s Expansion

    Despite the optimism surrounding this new venture, Shein, known for their highly affordable apparel – including 12-euro dresses and 20-euro jeans – is facing resistance from rival retailers, politicians, and regulators in France. French lawmakers have supported a draft law that proposes regulations on fast fashion. If enacted, this law would prohibit Shein from promoting their products through advertising.

    Yann Rivoallan, head of the fashion retail association Fédération Francaise du Pret-a-Porter, responded to the news with disapproval. In his statement, he expressed his concern about the impact of Shein’s massive influx of disposable products on the French market, after already causing the decline of several local brands.

    French retailers were already experiencing tough competition from global brands like Zara and H&M when Shein made its entry, attracting customers with its continuous discounts and engaging app. This year, a number of French rapid-fashion retailers, including Jennyfer and NafNaf, have had to initiate insolvency proceedings.

    The inaugural Shein store, located on the sixth floor of the BHV, is expected to open in early November. Additional openings in Galeries Lafayette department stores in Dijon, Grenoble, Reims, Limoges, and Angers are planned for the near future.

    Questions & Answers

    What is the significance of Shein’s new stores in France?
    The establishment of permanent physical outlets marks a major change in Shein’s retail strategy, as they have traditionally relied on temporary pop-up stores and online sales.

    Why is Shein’s expansion in France causing controversy?
    The rapid-fashion retailer’s expansion has been met with resistance due to concerns about their impact on local brands, and because they are under scrutiny from lawmakers proposing regulations on fast fashion advertising.

    When and where will the first permanent Shein store open?
    The first store is set to open in early November on the sixth floor of the BHV department store in central Paris. More stores are planned for Galeries Lafayette department stores in various French cities.