Coca-Cola loses PR battle in China


This is an article by Leon Emirali.
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Ancient China

In September 2011 I embarked on a five month study exchange trip from Coventry University to the Zhejiang University of Media in Communication, based in Hangzhou, China.

Aside from learning about the weird and wonderful food and intricate cultural norms, my aim in China was to gain an understanding of how PR functions in China and how this may differ from the UK and the rest of the Western world.

As students of public relations and media we trace the roots of the practice back to Edward Bernays and Ivy Lee in the late 19th and early 20th centuries. Yet defining the beginning of PR in China is a rather more challenging task.

The country, although historically accustomed to the notion of managing communication and influence through a variety of media, has little to point to as a ‘start-point’ for the industry.

PR as propaganda

A history of public relations in the Orient is far more ambiguous given the relative instability of politics in the region compared with the West.

Despite no official recognition, China is emerging as one of the most active nations involved with PR practices, with the government’s ‘propaganda department’ being the world’s largest state-run communications operation.

The Chinese Communist Party (CCP) has long used propaganda and media management to influence and inform Chinese citizens – a task made apparent given the CCP’s tight control and ownership over media in the country.

Corporations and non-government organisations in the country have had a harder time of utilising media practices until the recent reduction of media controls on both foreign and domestic organisations.

Coca-Cola versus Chinese public opinion

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Modern China

Perhaps the most famous example of the differences and challenges facing Western corporations looking to gain by using PR  in China is that of Coca-Cola’s failed attempted takeover of Chinese juice maker Huiyuan Juices.

Despite Coca-Cola’s previously warm relations with the Chinese government, the company failed to convince the Chinese public and the Chinese government to allow this take-over to go ahead. Many leading commentators have cited a poor and ambiguous public relations strategy as an issue that may have led to the collapse of this deal.

When the CCP first acknowledged that there might be issues with fair competition if this takeover was to go ahead, Coca-Cola recognised that a public relations campaign would benefit the bid to take over China’s largest privately-owned beverage distributor.

With three months until the hearing that would decide if this takeover would go ahead, Coca-Cola hired PR consultancy Edelman to run a campaign designed to win over the Chinese public who were already sceptical of letting Huiyuan fall into the hands of an American corporation.

Although such a claim is open to dispute there is significant reason to believe that a powerful mix of China’s growing global assertiveness and its history of communism and nationalisation of industry led to a robust opposition to the takeover bid.

China has brands too

Several newspapers and other popular national media portrayed a public reluctance to see one of China’s most successful soft-drinks brands fall into foreign hands. The country’s most popular English language paper, China Daily, expressed the concerns of the public in a particularly vocal manner.

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China past and present

The paper reported that ‘88.9% of those polled on Weibo (a Chinese micro-blogging site, similar to Twitter) opposed the deal’ and ‘suspected the deal could remove one more of China’s homegrown brands’.

This negative response could be seen as a unique public relations scenario to China compared to the West. As a nation ruled by the Communist Party, China has seen government control of industry and a much smaller private sector.

As a result of this, the Chinese people feel a sense of ownership of business in the country, especially at a time when China is looking to progress in global economic terms.

Should PR have been used to courting government officials through public affairs rather than just attempting to convince the general Chinese public that this would be a beneficial move for both the country and corporation?

My time in China itself allowed me to realise that public relations, and its outcomes, has to be linked to the public that is the audience of such messages.

Our two cultures contain explicit differences that are reflected in all elements of society including PR and media marketing. A successful campaign has to take these differences into account, which Coca-Cola clearly failed to recognise.

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