A research proposal: Will the Cai Guo-Qiang fireworks controversy hurt Arc’teryx’s sales? 🎆 | Following the Yuan
Let's get to the point.
It’s been almost a week since fireworks artist Cai Guo-Qiang initiated his show “Rising Dragon” on the Tibetan Himalayan Plateau for Anta-owned Canadian outdoor brand Arc’teryx.
The conversations about the controversy have not died down, because a social event of a business nature like this presents a rare opportunity for the public to voice their opinions about the privileged class.
The latter can make self-centric decisions without fully aligning themselves with the Canadian HQ, and even if it goes against the Chinese president’s environmental protection concept “Lucid Waters and Lush Mountains Are Invaluable Assets,” which is the default signage in many of China’s natural landscapes, like the Hollywood sign.
Instead of another analysis after my posts on LinkedIn from the consumer protest angle and a Substack Note, about how local villagers were seen cleaning the mess, I want to write a research proposal to get to the point — will it really affect Arc’teryx’s sales in the mid to long term?
Predictions aren’t vibe-based. Here, I hope to show how I address a retail brand-focused research framework and methodology, how I try to navigate my perceptions and prejudices as a researcher. And I genuinely welcome your feedback and thoughts.
A quick reminder of people’s reaction:
𝑪𝒐𝒓𝒆 𝒄𝒐𝒎𝒎𝒖𝒏𝒊𝒕𝒚’𝒔 𝒓𝒆𝒔𝒑𝒐𝒏𝒔𝒆: Outdoor enthusiasts, environmental protection and wildlife conservation professionals reacted on day one. They say that they only see arrogance and hypocrisy when the marketing copy says “paying tribute to the nature,” and the brand runs workshops on “leave no trace,” while getting it so wrong.
They made well founded comments from environmental, noise, animal safety, cultural and religious perspectives, and doubted how such event could have be approved.
It turns out the local governments — rather than environmental regulators — straight up approved because the brand claimed to use “biodegradable” materials. Professionals argued that these materials aren’t biodegradable in high-alpine regions, not to mention the damage caused on other fronts.
𝑹𝒆𝒔𝒑𝒐𝒏𝒔𝒆 𝒇𝒓𝒐𝒎 𝒆𝒙𝒕𝒆𝒏𝒅𝒆𝒅 𝒂𝒖𝒅𝒊𝒆𝒏𝒄𝒆/𝒑𝒖𝒃𝒍𝒊𝒄: Others also point out the brand’s and Cai’s privileged position, in their words:
How come [China] allows fireworks in a plateau ecological zone, while we can’t even do it on the plains during Chinese New Year? (While fireworks are considered a Chinese tradition, there has been a longstanding ban since 2011; it has only been loosened up recently as China’s air quality has improved.)
The impact, from my perspective and hypothesis:
This incident is a milestone marketing fiasco.
While past Chinese consumer protests have mostly happened because of differences in political correctness between China and the West (namely, sovereignty issues over Taiwan and HK, use of Xinjiang cotton, etc.), this one caused material damage to the environment and hurt the brand’s core value.
It should be considered alongside in the context of China’s rising soft power, which has materialized in international M&A long before shifts in international politics and the consumer market.
Pre-COVID, conglomerate Fosun’s acquisition of Lanvin raised concerns about whether a bunch of business-minded execs could turn around a storied European fashion brand.
There was surely some mess behind the scenes (French CEO Jean-Philippe Hecquet left after 18 months). And on the surface, there has also been one central commonality: Chinese capital/management suddenly want the French brands to be China-centric.
That’s why Lanvin held the Spring/Summer 2021 show in Shanghai’s historic Yu Garden, which set the precedent for another Chinese-controlled French brand Ami Paris’s show in Suzhou for its Fall/Winter 2024. Also, both have Chinese celebrities as their global ambassadors. Neither makes sense because it confuses the audience about whether the brand has French or Chinese DNA.
Due to the shift of power dynamics: the management who have thin brand management experience believe that only China matters and “I” make the call, not the laowais.
A key point to watch now is whether it’d be perceived anti Xi’s environmental protection concept and corresponding guidelines. I believe Anta is pulling all the strings and corroborating with state media and social media platforms to prevent that from happening.
Arc’teryx only became a middle class must-have and has been able to branch out beyond the outdoor community because the latter recognized its technical performance, which supports its brand value and high prices.
The brand is empty without their approval.
My hypothesis is that it will impact the sales. How do I prove that right or wrong?
A research proposal on Arc’teryx:
My first step would be to specify the framework from Arc’teryx China’s perspective: What are their customer archetypes? How much do their VIPs spend — what’s their internal rankings for them? How do they look at the China market geographically?
So after reading about its recent performances in Amer Sports’ annual report, the first group of people I want to talk to are both current/ex-store managers and executives. [Corporate employees are increasingly difficult to reach as large Chinese corporations sign NDAs with their staff. There have been cases where current employees from EV companies were punished after talking to researchers.]
Then it’s the consumers; we need them to be distributed across key sales regions while giving more room to top-performing regions and stores.
Arc’teryx stores are mostly in first- and second-tier cities, but there should also be a proportion of lower-tier customers who reportedly buy Arc’teryx goods through sales agents/daigou.
When it comes to design questions for them, it goes without saying that it’s important to let them speak about their perceptions first and then ask many follow-up questions, instead of simply asking whether they feel a certain way.
So here are the key information to obtain:
Filings by Amer Sports
Informational interviews with 3-5 Arc’teryx’s current/ex-store managers
3-5 Anta/Amer/Arc’teryx executives (if it’s unlikely to get them, then interview competitors or peers)
20-30 consumers in tier-1-3 cities across China (key metrics to be specified after talking to staff)
Social media listening, with sentiment analysis via NLP
Third-party sales performance tracking
When it comes to the analysis stage, I would identify the push and pull factors, the following ones are based on my hypothesis and are subject to change.
Drivers that will dampen Arc’teryx’s sales: protest from the outdoor community, value-driven consumers, competition, damaged brand value, damaged social equity, scrutiny from the public and media
Opposing drivers: Anta and Arc’teryx’s capability to censor and direct public opinions (a typical way is to become state media and platforms’ big accounts), which is already happening, influencers rejecting collaborations in fear of backlash, size of supporters VS haters among consumers after the controversy
Feel free to borrow the framework, or hire me to do it if you’re curious. 🔚