By Brianna Zhang MBA

For the Chinese business culture in Foshan, China, the arrival of the Friendship store (Guangzhou) in the heart of downtown created such excitement and buzz. The Friendship Store had been under construction for around two years with many residents wondering if it would ever open. On December 29, 2011, the Friendship store opened to a flood of people curious to peruse its seven floors to see what the luxury department store had available. Everything was new and glistening as shoppers eagerly weaved in and out of each section.

The Friendship store is located in the International Business Center (ICC) in the heart of the Temple district in Foshan, China. Within walking distance to two temples, the Friendship store with all of its glamor seems to be in the perfect spot for many blessings within the Chinese business culture. However, the Friendship store on April 2012 had a major turn of misfortune with local residents and bad PR.

As with many brick and mortar businesses, the ability to draw customers’ attention to the building is incredibly important since there is so much competing for their attention. The Guangzhou Friendship store in Foshan wanted to create a large presence. The facade of the Friendship store already included a large LED screen used for advertising.

However, one LED screen did not seem to be enough and begin prepping to set up another LED screen on the north side of the building. Unfortunately, the owners of a commercial property and resident apartments were not keen at all with placement of the new LED screen. The owners of the neighboring commercial property used the side of its building for a paid billboard placement. The billboard has had major commercial names rent the billboard space – most recently Skoda Cars.The placement of the new LED screen would completely eliminate coverage of the billboard. The residents felt the current LED screen already caused a lot of light pollution and could not stomach additional lights.

Both groups tried to speak to the owners of the Guangzhou Friendship store to express their valid concerns. However, the owners did not feel the concerns should merit a change in plans and continued on with initial construction of the LED Screen. This is the moment things turned for the worst, and the Chinese business culture took a rare step toward protesting.

Members of the public and area residents took the street to protest the actions of the Guangzhou Friendship store. The signs state the illegal installation of the LED Screen and encourage others to support the government office who governs such permitting. The protest continued for three days. The protest even led to a heated exchange between a resident and security guard. (photos are in the second link) In the end, the Guangzhou Friendship did not receive proper permitting for the installation and was fined for proceeding. It is important to note that the story was aired by local TV stations, printed in local newspapers, and on several news websites in China.

The event goes to demonstrate that people within the Chinese business culture are willing to demonstrate publicly for something they believe in. Of course, protest must be approved by the government. It is still amazing how individuals outside of China believe that the communist party suffocates its citizens in all realms of speech. Companies entering the Chinese market should be aware that demonstrations are possible and could result in a lot of negative press. Therefore, it is important to consider every decision and how it can be perceived in the court of public opinion. It takes a long time to build a excellent brand reputation but it takes only a short time to lose brand loyalty.

References

http://www.ausspirit.com.au/dev/node/55

http://bbs.ttx.cn/simple/?t5531009.html

Brianna Zhang, MBA serves as the program manager of the Kelley Small Business Institute at Francis Marion University (Florence, S.C., U.S.A.). She is also a freelance marketing consultant for Square Meter Ceramics Company Limited (China).