Group 1 - The core issue revolves around Swatch's controversial advertisement featuring a model making a "slant-eyed" gesture, which is perceived as a symbol of racial discrimination against East Asians [2][5][6] - Following the backlash, Swatch quickly removed the image from its Chinese website but did not issue an immediate official statement [5][6] - The company's apology, issued the next day, acknowledged the issue but lacked specific details on how such content passed their review process and what measures would be taken to prevent future occurrences [6] Group 2 - The incident highlights a potential oversight in content review and a perceived disregard for the Chinese market by Swatch, which is crucial for its revenue [6] - In 2023, Swatch's sales in China grew by 10.9% to 2.63 billion Swiss francs, accounting for 33.3% of the group's total sales [6] - The company must demonstrate a deeper understanding of Chinese culture and consumer sentiments to regain trust, rather than relying solely on apologies and image removals [6] Group 3 - The second controversy involves YingShi Innovation's founder throwing cash at employees during a celebration, which sparked debate over whether this act was a form of humiliation or a genuine incentive [7][11] - The company issued a statement clarifying that the cash was from the founder's personal salary and emphasized the need to align employee behavior with public image standards [11][12] - This incident reflects a broader conflict between corporate incentive culture and public perception, indicating the importance of emotional resonance and value alignment in employee motivation strategies [12]

Group 1: Swatch Controversy - Swatch faced backlash for an advertisement featuring a model making a "slant-eyed" gesture, perceived as a racist symbol against East Asians [2][4] - The company quickly removed the image from its Chinese website but did not issue an immediate official statement [4] - Swatch issued an apology the following day, acknowledging the issue and stating that all related materials were deleted globally [4][5] - The incident highlights potential oversight in content review and a lack of respect for the Chinese market, which is crucial for Swatch's sales [5] Group 2: Impact on Sales - In 2023, Swatch's sales in the Chinese market grew by 10.9% to 2.63 billion Swiss francs, accounting for 33.3% of the group's total sales [5] - Despite a projected 30% decline in 2024 sales, the Chinese market is still expected to represent 27% of total sales [5] Group 3: YingShi Innovation Controversy - YingShi Innovation's founder sparked controversy by throwing cash at employees during a celebration, leading to mixed public reactions [6][10] - The company issued a statement clarifying that the cash was from the founder's personal salary and emphasized the importance of maintaining a positive public image [10][11] - The incident reflects a clash between corporate incentive culture and public perception, highlighting the need for companies to align their incentive mechanisms with broader societal values [11]

Core Viewpoint - Swatch Group faced backlash due to a controversial advertisement perceived as racially insensitive, leading to a public apology and removal of the related content [1][3]. Company Overview - Swatch Group is one of the largest watch manufacturing and distribution groups globally, with brands including Longines, Tissot, Omega, and Breguet in addition to its basic Swatch line [4]. Financial Performance - For the first half of 2025, Swatch Group reported sales of CHF 3.059 billion, a decline of 11.2% year-over-year, and a net profit drop of 88% to CHF 17 million, resulting in a net profit margin of 0.6% compared to 4.3% in the previous year [6][7]. - The Chinese market is the largest regional market for Swatch Group, generating CHF 2.63 billion in net sales in 2023, accounting for 33.3% of total sales. However, sales in this market fell by 30% in 2024 [6][8]. Market Dynamics - The Swiss watch industry is under pressure from a strong Swiss franc and declining global demand, exacerbated by a recent increase in tariffs on Swiss imports to the U.S. to 39%, which could significantly impact exports [10]. - The U.S. is the largest export market for Swiss watches, accounting for 16.8% of total exports, approximately CHF 4.4 billion [10]. - Swatch Group derives 18% of its sales from the U.S., and the company has already raised prices by 5% in response to the tariff announcement [10].

Group 1 - Swatch brand's recent advertisement featuring a "squinty eyes" model has sparked controversy and discussions on social media platforms like Douyin and Weibo [1][3] - The advertisement has drawn attention to the historical context of "squinty eyes" as a derogatory term used against Chinese people, particularly in Western media [3] - Swatch's parent company, Swatch Group, reported a significant decline in sales and net profit for the first half of 2025, attributing the downturn to challenges in the Chinese market [3][4] Group 2 - The Chinese market has historically been a crucial contributor to Swatch Group's performance, with a net sales figure of 2.63 billion Swiss francs in 2023, accounting for 33.3% of the group's total sales [4] - Despite a projected 30% decline in sales for 2024, the Chinese market still represents 27% of the group's revenue [4] - Swatch Group's CEO highlighted potential opportunities arising from competitors like Seiko reducing their market presence in China, suggesting a possible recovery in the second half of the year [5]

Core Viewpoint - The luxury watch market, particularly brands like Swatch, is experiencing significant challenges due to changing consumer preferences in China, shifting from status symbols to value investments [4][14][16]. Financial Performance - Swatch reported a sales revenue of 3.06 billion CHF in the first half of 2025, a decline of 11.2% compared to the previous year [4][5]. - Operating profit fell from 204 million CHF to 68 million CHF, with an operating margin of 2.2%, down from 5.9% [4][5]. - Net profit plummeted 88% to 17 million CHF, with a net margin of 0.6%, compared to 4.3% in the previous year [4][5]. Market Dynamics - The decline in sales is primarily attributed to the Chinese market, which saw a 30% drop in sales in 2024, despite accounting for 27% of total sales [6][8]. - The overall Swiss watch export value decreased by 0.1% in the first half of the year, with Asia experiencing a notable decline of 7.2%, largely driven by drops in mainland China and Hong Kong [8][9]. Consumer Behavior Shift - Chinese consumers are increasingly prioritizing value over status, leading to a decline in demand for luxury watches [14][16]. - The high-end watch market is facing pressure as the perception of luxury watches as "mobile assets" diminishes, with a focus shifting towards personal experience and emotional connection [16] . Competitive Landscape - The rise of smartwatches poses a significant threat to traditional watch brands like Swatch, with global shipments of wearable devices increasing by 10.5% in the first quarter of 2025 [19][20]. - Major players in the smartwatch market, such as Huawei and Xiaomi, are gaining market share, further challenging traditional luxury watch brands [21]. Strategic Responses - Swatch is attempting to leverage its luxury brand associations through collaborations with high-end brands like Omega and Blancpain to attract younger consumers [22]. - The company is also exploring technological enhancements, including AI-driven personalized watch designs, to remain competitive in the evolving market [22].