Peep Insights: The Impact of the Olympics on France and French Brands

Since the incident in April, when the Olympic torch was extinguished by Pro-Tibet protestors in Paris, Chinese consumers have responded with boycotts of popular French brands like Carrefour and Dior. Adding to the anti-French sentiment have been threats by Nicolas Sarkozy of boycotting the opening ceremony of the Olympic games in August as well as the possibility of Sarkozy meeting with the Dalai Lama during a conference on Buddhism in France.

The WSJ recently reported that Sarkozy will attend the Beijing Olympics’ opening ceremony in August, but what about all of the damage that has already been done? In June, the French Ambassador to China announced that tourism from Beijing to Paris had fallen 70 percent following the April incident, which is alarming considering France was the most popular European holiday destination for Chinese tourists in 2007. All of these events point to an even greater question. What will France and the brands associated with the country mean to Chinese consumers once the Beijing Olympics are over?

With China’s influential, rising middle class, the negative impression left by France in these past few months may have a significant impact on the future of French brands in the Chinese marketplace. French luxury brands, especially, which will rely heavily on China for growth in the coming years, may need to become more proactive in reducing this anti-French sentiment and more sensitive when it comes to politics. One way brands may be able to do this is by creating a dialogue with Chinese bloggers to maintain positive relations. A recent call by Chinese bloggers for a boycott of all TBWA ads in response to an offensive Amnesty International campaign from the agency’s Paris office demonstrates the influence of blogs and the need for damage control by companies. Therefore, as Sarkozy wavers between politics and business, brands and agencies will need to take a firm position to avoid a backlash leading to serious declines in sales.

- Contributed by Peep Insights