Swatch apologizes for a controversial advertisement featuring what appears to be a 'bias-eyed' character, facing criticism in China.
Swiss watchmaker Swatch has found itself in hot water over an advertisement that featured a model pulling the corners of his eyes back, a gesture resembling the derogatory "slanted eye" stereotype historically used to mock Asians. The imagery sparked uproar and calls for a boycott on Chinese social media platforms [1][2].
The controversy, which has not been isolated to China, has widely been condemned globally. Swatch quickly responded by posting an apology on its Weibo and Instagram accounts, stating that they had "taken note of the recent concerns" and had immediately removed all related materials worldwide [3]. Despite the apology, many Chinese consumers felt it was insincere, accusing Swatch of discrimination and prioritizing profits over respect towards Chinese people [1].
The Swatch ads were not only criticized in China but also globally, contributing to a broader conversation about the normalization of racism against Asians [1]. The controversy may have had a lasting impact on the company's reputation and sales, contributing to its financial struggles.
Swatch's heavy reliance on the Chinese market for revenue, with around 27 percent of its sales coming from China, Hong Kong, and Macau in 2024 [9], may have left the company vulnerable to market fluctuations in that region. The downturn in demand for Swatch's products was not limited to consumer goods overall, but also affected other regions outside of China [7]. As a result, Swatch's revenue slumped 14.6 percent to 6.74 billion Swiss francs ($8.4 billion) in 2024 [4].
The financial troubles of Swatch may have been exacerbated by weak consumer confidence and economic downturns in various regions, not just China [8]. Swatch faces a 39 percent tariff on its exports to the United States [5], which may have contributed to its financial struggles. Swatch's shares have continued to decline, falling by more than half since early 2023, independent of the controversy surrounding the ads [6].
Swatch apologized for any distress or misunderstanding caused by the ads and removed all related materials worldwide following the concerns [3]. However, the apology and removal of the controversial ads were not enough to immediately reverse the company's financial decline, indicating that the damage may be deeper than initially thought [10].
As of now, Swatch Group has not yet provided a detailed response to the controversy surrounding the ads beyond the initial apology and removal of related materials [3]. The company's future in the Chinese market remains uncertain, but it is clear that the controversy has had a significant impact on Swatch's reputation and financial performance.
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