Core Viewpoint - Swatch, a Swiss watch brand, faced backlash due to a controversial advertisement featuring a model with "slant-eyed" expression, perceived as racially insensitive towards East Asians, leading to strong protests from Chinese consumers [3][5]. Group 1: Incident Overview - The controversial advertisement included a model making an exaggerated "slant-eyed" expression, which many interpreted as a form of racial discrimination against East Asians [3]. - Swatch's official customer service acknowledged the issue and stated it would be escalated to relevant departments for further consideration [5]. - The "slant-eyed" gesture has historical roots in 19th-century Western racism and has been widely recognized as a discriminatory symbol against East Asians [5]. Group 2: Company Background and Financial Performance - Swatch Group is one of the largest watch manufacturing and distribution groups globally, owning brands such as Longines, Tissot, Omega, and Breguet, in addition to its basic Swatch line [6]. - In the first half of the year, Swatch reported a net sales figure of 3.06 billion Swiss francs, reflecting a year-on-year decline of 7.1% [6].

Core Viewpoint - Swatch's recent marketing campaign featuring a "squinty-eyed" model has sparked significant backlash from Chinese consumers, highlighting issues of racial insensitivity and cultural appropriation [1] Group 1: Marketing Controversy - The promotional image, which depicts a model making a "squinty-eyed" gesture, has gone viral on social media and led to strong protests from Chinese consumers [1] - The term "squinty-eyed" is associated with racial discrimination against East Asians, originating from 19th-century Western stereotypes [1] - Following the backlash, Swatch has removed or hidden the controversial image from its websites in China, Japan, and South Korea, while it remains visible in Hong Kong, Macau, and Western regions [1] Group 2: Financial Performance - Swatch reported a sales revenue of 3.06 billion Swiss francs for the first half of the year, a decline of 11.2% year-on-year [2] - The company's operating profit fell from 204 million Swiss francs in the previous year to 68 million Swiss francs, resulting in an operating profit margin of 2.2%, down from 5.9% [2] - Net profit plummeted by 88% from 147 million Swiss francs to 17 million Swiss francs, with a net profit margin of 0.6%, compared to 4.3% in the same period last year [1][2] - The decline in sales is attributed entirely to the Chinese market, while other regions have achieved record sales levels in local currencies for 2023 and 2024 [2]