Why China’s boycott of South Korea is viral marketing genius
The nature of China’s social media environment lets Beijing turn South Korea-bashing into a viral trend and celebrities and companies are cashing in.
China’s longstanding opposition to the installation of THAAD missile defence systems in South Korea boiled over this week, as a slew of measures targeting South Korean businesses and products were enacted. While South Korea and the U.S see THAAD as an important counter to North Korea, Beijing fears that the system could also be used to target Chinese assets in the region. The THAAD issue has been a long drawn-out affair, and as the weapon system finally arrives in South Korea, China has reacted with a vengeance.
At the center of the storm is South Korea’s Lotte conglomerate, whose decision to provide Seoul with one of its golf courses as a THAAD deployment zone has made the company the main target of Beijing’s ire. The company’s duty free website was harried by DDoS attacks, and the Lotte China website has been suspended. Moreover, 55 stores – more than half of the company’s locations in China – have been closed down after failing regulatory ‘inspections.’
Interestingly, the backlash against Lotte is so severe that Japan’s Rakuten Global Market publically denied any affiliation with Lotte on its official Weibo microblog: Rakuten and Lotte are spelt the same, but pronounced differently in Mandarin. Rakuten is trying to prevent a branding nightmare as Chinese consumers avoid anything Lotte-related.
A joint venture between Lotte Shanghai Foods and Hershey has also been ordered to stop production. The month long shutdown could cost the venture $3.5 million in lost revenue. This is also an important milestone in the controversy as it is the first time an American company has become entangled in the issue.
Indeed, despite America’s role in Seoul’s THAAD deployment, Washington has escaped China’s backlash with South Korea taking the full brunt instead. China is extremely wary of pulling the U.S into this kind of retaliatory tit-for-tat, especially since the election of Donald Trump. This was especially true this week, as Chinese tech giant ZTF was…
Global Risk Insights is a world-leading publication for political risk news and analysis. Our global network of experts provides timely, insightful analysis on political events shaping business, economic, and investment climates in every corner of the world.