China: Multinationals Hear It Online

(page 2 of 2)

National Pride Is Surging

The phenomenon isn't new. Toyota Motor (TM) was rapped back in 2003 for an ad showing Chinese lions bowing to and saluting its Prado SUV, while Nike (NKE) got in trouble for a 2004 television ad that showed NBA star LeBron James beating up Chinese dragons. Not all of the complaints are about politics. In 2006, computer buyers angry at Dell (DELL) for allegedly poor service found like-minded Chinese in online chat rooms (BusinessWeek.com, 8/3/06).

But with Internet users growing at more than 50% a year—and tensions in China running high because of Tibet, the Olympics, and now the earthquake—the scale of the bashing this year is unprecedented. French automaker PSA Peugeot-Citroën (PEUP.PA) apologized in January for what was meant to be a humorous Citroën advertisement featuring a photo of a scowling Mao Zedong. German sportswear maker adidas (ADSG.DE) was similarly contrite after a Chinese blogger discovered its new handbag featured a design combining the Chinese flag with the company logo. "The product was pulled from the marketplace," says Erica Kerner, director of the Beijing 2008 Olympics Program for adidas. "There was no intent to do anything that was in any way disrespectful. It was meant to be a celebration of the Games and of the Chinese spirit."

What's driving all the anti-foreign company venom? Surging nationalism is a key element. And proud Chinese youth emboldened by the upcoming Beijing Olympics are ultra-sensitive to any hint that companies aren't showing proper respect for China and the Chinese people. "Everyone should remember these are immoral companies," said the most widely distributed text message accusing foreign companies of not supporting the Sichuan earthquake relief. "Love China! Support Chinese products! China will be stronger!"

There is no evidence yet to suggest that all the negative buzz is affecting sales. But with so many companies counting on the growing Chinese market to power their profits now and in the years ahead, it's not surprising that nobody is ready to take a chance.

See BusinessWeek.com's slide show for a look at 10 companies that have been stung by China's blogosphere.

Roberts is BusinessWeek's China bureau chief and Asia news editor. With Chi-Chu Tschang