Core Viewpoint - Balenciaga's recent controversial product launches, such as a 2,700 yuan hairpin that resembles a 1 yuan version available on e-commerce platforms, highlight the brand's strategy of leveraging controversy to maintain market attention and drive sales, though this approach may risk long-term brand loyalty and image [1][2][3][4]. Product Strategy - Balenciaga continues to release perplexing fashion items, including the 2,700 yuan hairpin and previously criticized products like a 4,000 yuan keychain and a 6,700 yuan bath towel, which have sparked public debate [2][7]. - The hairpin's design is nearly identical to a standard iron hairpin, with its high price attributed to the Balenciaga branding rather than material or craftsmanship [3][7]. - Despite the high prices, these controversial items often lead to increased sales and limited stock availability, indicating a successful short-term sales strategy [3][4]. Financial Performance - In 2024, the global luxury goods market experienced a downturn, with total sales dropping to 1.478 trillion euros, a 2% decline year-on-year, and a loss of approximately 50 million consumers [11]. - Kering Group, Balenciaga's parent company, reported a 12% decrease in revenue to 17.194 billion euros and a 62% drop in net profit to 1.133 billion euros for the same year [11][12]. - The decline in performance is primarily linked to poor sales of Gucci, which accounts for nearly half of Kering's total revenue, with a 23% year-on-year revenue decrease [12][13]. Brand Image and Consumer Sentiment - The reliance on controversy for brand visibility has raised concerns about potential long-term damage to Balenciaga's reputation, as negative consumer experiences and complaints have been widely shared on social media [16][17]. - Instances of poor customer service and product quality issues have led to significant consumer dissatisfaction, with numerous complaints filed against the brand [16][17]. - Analysts warn that if Balenciaga fails to convert controversy into a positive brand image, it may face challenges in maintaining its position in the luxury market, especially during a period of industry contraction [17].