Luxury brands on social media in China might get axed due to the country’s VPN crackdown. Source: Shutterstock

China’s crackdown on the Internet might spell disaster for luxury brands

AS VPN providers are seemingly compromised one after another, even the world’s premier tech firms are starting to feel some heat about China’s crackdown on free and unrestricted Internet access. 

The Chinese government’s ongoing initiatives against Virtual Private Networks (VPNs) are gaining steam, and it might very well change the landscape of the virtual business world in the Asian economic superpower.

Take Apple, for example. Back in July, Apple CEO Tim Cook authorized a purge of numerous VPN apps from the Chinese iOS App Store. While Apple really did nothing more than comply with the Chinese government’s ongoing VPN crackdown, the iPhone-maker was nonetheless met with a notable degree of criticism in its home country.

As noted in a recent Engadget report, Apple is currently under fire from Republican Senator Ted Cruz and Democratic Senator Patrick Leahy. The two politicians, which are usually on opposite sides of the argument due to their political parties, actually saw eye-to-eye when it came to Apple’s massive VPN pullout.

Longchamp and a handful of other luxury brands are relying on WeChat to sell their products. Source: Jing Daily

In a letter sent to the Cupertino-based tech giant, the US senators expressed their concern that Apple might be “enabling the Chinese government’s censorship and surveillance of the Internet.”

What is particularly challenging about China’s ongoing VPN crackdown is the fact that the government has been quite selective about the information it is releasing to the public. Last week, after WhatsApp was practically rendered useless in the country, China’s cyber regulators were still dismissing the VPN ban as false, with the Ministry of Industry and Information Technology stating that China was not blocking legitimate Internet access to users, according to IOL.

Despite China not yet releasing its final statement about the ongoing VPN blocks in the country, the fact remains that some websites and applications are now pretty much inaccessible within the confines of the nation. This, of course, has brought numerous problems for individuals and businesses that rely on VPNs to go about their day-to-day business.

Even before the VPN blockade, China’s Great Firewall has already given enterprises an additional hurdle to jump over when doing business inside the country. As noted in a China Briefing report, even basic business services such as Dropbox, GitHub and Google Documents do not function normally in China. Thus, enterprises usually end up adopting an alternative platform, such as China’s GoKuai, which is entirely compliant with the country’s Internet rules.

Many popular consumer brands with a huge demographic in China have been finding workarounds in their Chinese operations, with several firms launching their own .cn websites to reach Chinese consumers. Luxury brands such as Hermes, Gucci, and Louis Vuitton, for example, have already done this, with each company launching a dedicated .cn webstore to cater to the Asian nation.

While workarounds for China’s Great Firewall and VPN blocks exist, these extra steps nonetheless require a significant amount of resources. For large enterprises, this would not be a problem, as using workarounds such as establishing a .cn website would pose no financial issues.

People watch a broadcast of Chinese President Xi Jinping delivering his speech during the opening of the 19th National Congress of the Communist Party of China, at a shopping mall in Beijing, China, on Oct 18, 2017. Source: Reuters.

For small businesses trying to breach the lucrative Chinese market, however, the story might be quite different. Launching and running a dedicated .cn website, after all, requires a solid investment, and that is something that some SMEs just can’t afford to do.

Fortunately, Jackie Chen, social media content manager at Hong Kong-based PR agency ChoZan, stated that despite the tight constraints in the Chinese virtual market, there are still options for enterprises to engage in business in China.

In a statement to Jing Daily, Chen advised brands to seek out alternatives beyond the Chinese government’s sanctioned services. The ChoZan executive, for one, remarked that Weibo, with its more open and public nature, would be a great alternative for the semi-closed WeChat.

“As a multifunctional platform, WeChat can satisfy most needs for brands in terms of social networking, marketing, advertising and even e-commerce. However, WeChat is merely an option, and there are still many additional ways for these foreign… brands to set up their presence in mainland China.

“As for sales channels, they can set up their official stores in large e-commerce platforms like Tmall and JD or cross-border e-commerce platforms like NetEase Kaola and Xiaohongshu.”






COMMENTS