What's Happening?
On Running, a performance footwear brand, is navigating challenges to its growth in the Asia-Pacific region, particularly in China, following a controversy involving its ambassador, Kylian Mbappé. Last month, Mbappé, the face of On's new football line,
reportedly laughed at a meme depicting his face on Mao Zedong's body and referred to the former leader as a dictator. Although the Real Madrid forward later apologized, the incident sparked significant backlash in China. Despite this, On cofounder and co-chief executive officer Caspar Coppetti stated that the Asia-Pacific region is a 'match made in heaven' for the brand's premium positioning. On reported a 31.9 percent growth in the Asia-Pacific region on a constant currency basis in the third quarter, reaching 189.9 million Swiss francs.
Why It's Important?
This situation highlights the significant risks and complexities global brands face when expanding into culturally sensitive markets like China. The controversy involving Kylian Mbappé underscores how the actions of brand ambassadors, even if unintentional or quickly apologized for, can have immediate and substantial repercussions on a company's reputation and market access. For On Running, a brand focused on premium positioning, maintaining a positive image is crucial for consumer trust and sales. The incident could potentially alienate a large segment of the Chinese consumer base, impacting sales and growth targets in a key strategic region. It also demonstrates the delicate balance between global marketing strategies and local cultural sensitivities that international businesses must master.
What's Next?
On Running plans to continue its deliberate and controlled pace of expansion in the Asia-Pacific region, aiming for growth closer to the mid- to high-20s in the coming quarters. The company is focusing on being more selective with partners and avoiding highly promotional periods like 11/11 to maintain its premium brand image. While On's co-CEO did not directly address the Mbappé controversy during the earnings call, the brand's strategy will likely involve careful management of its public image and ambassador relationships in the region. The success of this approach will determine if On can overcome the negative sentiment generated by the incident and continue its growth trajectory in China and other Asian markets.
Beyond the Headlines
The Mbappé controversy for On Running illustrates a broader trend of increasing scrutiny on public figures and brands in the digital age, especially concerning geopolitical and cultural sensitivities. Companies are increasingly held accountable for the actions and statements of their ambassadors, making due diligence and cultural awareness paramount in endorsement deals. This incident could prompt other brands to re-evaluate their ambassador selection processes and crisis management protocols, particularly when targeting diverse international markets. It also reflects the growing power of social media and online discourse to rapidly amplify controversies, forcing brands to react swiftly and strategically to protect their market standing and consumer relationships.
