(Bloomberg) -- L’Oreal SA closed shops throughout Hong Kong as hundreds of demonstrators protested the French cosmetic maker’s decision to cancel a concert by a pro-democracy singer after Chinese consumers called for a product boycott.
The company’s Lancome brand on Sunday called off a June 19 promotional concert featuring Denise Ho Wan-see, a singer known for her support of Hong Kong’s Occupy Central protest movement in 2014. The state-run Global Times newspaper had earlier criticized Lancome for hiring Ho to do its publicity, sparking an internet campaign against the brand in China.
“There has been varying political pressure exerted by the Chinese government on corporations to self censor, but this isn’t even an event inside China,” said Avery Ng, chairman of the League of Social Democrats, a pro-democracy political party and one of the protest organizers. “This case shows that the Chinese government will use its power to threaten other multinationals.”
About 200 demonstrators holding signs urging L’Oreal not to "kowtow to Beijing" and protesting self-censorship gathered outside L’Oreal’s local headquarters at the Times Square mall in Hong Kong’s Causeway Bay retail area. L’Oreal locations closed Wednesday included all Lancome shops across the city and those of outlets of other brands located in Causeway Bay, according to a customer service representative. Stores were scheduled to reopen Thursday.
The cross-border criticism provides a cautionary tale for companies doing business in China of the risk that any action -- marketing or otherwise -- that could offend the government could complicate sales in one of the world’s biggest and fastest-growing markets. The ruling Communist Party not only tightly curbs freedom of expression, it commands a legion of bureaucrats who fabricate almost a half billion social media comments each year in an effort to steer public opinion, according to a study last month led by a political scientist from Harvard University.
Lancome said in a statement on its Facebook page that it canceled the concert for “possible safety reasons.” Calls to L’Oreal’s Hong Kong office went straight to voicemail as did calls to L’Oreal’s local spokeswoman. Representatives for the company’s French headquarters also couldn’t immediately be reached for comment when called outside of normal business hours.
“If companies wish to participate in the Chinese market and profit from it, they must not do anything that threatens the interests of China, this applies to both inside and outside of the country’s borders,” Global Times said in an editorial Tuesday. “This is a universally accepted idea.”
Lancome’s Weibo page was peppered with comments from Chinese users. “Lancome, get out of China,” said one, with the handle FredLu52193. “Stupid Lancome, you are losing the market from your China Daddy,” said BingbingBingbing.
The case is reminiscent of the 2012 protests after luxury goods retailer Dolce & Gabbana banned pedestrians from photographing its Hong Kong storefronts, suggesting the policy was intended to protect rich mainland Chinese shopping inside. The incident was a seminal moment for some Hong Kong people worried about China’s encroachment and helped fuel a "localist" political movement, some of whose members have called for independence from the mainland.
To read more about Hong Long’s localist movement, click here.
China’s color cosmetics markets was worth about 25.1 billion yuan ($3.8 billion) last year, and L’Oreal was ranked No. 1, with a 30 percent share, according to Euromonitor data. LVMH Moet Hennessy Louis Vuitton SE was No. 2 in the market with 6 percent.
--With assistance from Ting Shi and Corinne Gretler To contact the reporters on this story: David Tweed in Hong Kong at email@example.com, Daniela Wei in Hong Kong at firstname.lastname@example.org. To contact the editors responsible for this story: Rosalind Mathieson at email@example.com, K. Oanh Ha at firstname.lastname@example.org, Brendan Scott, Darren Boey
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