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You are here: Home Members Warwick Business School Comment from luxury brand expert: Chanel ban on selling products to Russians is a bold but risky decision

Comment from luxury brand expert: Chanel ban on selling products to Russians is a bold but risky decision

Posted by Warwick Business School at 08 April 2022, 22:38 CET |
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Qing Wang is Professor of Marketing and Innovation at Warwick Business School and an expert on luxury brands. Commenting on Chanel's decision to stop selling its products to Russians, she said:

"Many Western firms halted operations in Russia after the Ukraine war started. But Chanel has gone further by stopping selling its products to Russians outside the country, who may bring the products back home.

"It is a bold step. Russia is one of the largest and growing markets for western luxury goods. To stop selling to this market will hurt the sales in the short term, but companies are increasingly taking a political stand as part of their CSR strategy.

"CSR is deeply rooted in our value system and for luxury companies, most of which originated in Western Europe, the Ukraine war can be seen as being fundamentally against such value system. Therefore protest against the war helps to protect the brand's value.

"However, taking a bold political stand like this is not without risks. Research conducted by PR firm Clutch found that most consumers think brands should stay silent on political issues.

"Nearly two-thirds of those surveyed (63%) said they were likely to continue shopping at businesses that stayed silent on issues they care about.

"Sentiment analysis around this question suggests context matters. The Ukraine war is so different from any of the political crisis we had in recent times. People's true opinion on whether Chanel's actions are appropriate, or a step too far that borders on Russophobia (which could be damaging to the brand), remain to be seen.

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