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United faces social media circus, not brand meltdown, in Asia

United faces social media circus, not brand meltdown, in Asia

While the United Airlines scandal is playing out in the United States, it has become an equally compelling topic in Asia, highlighting the transnational public-image risks facing companies today. The press and social media are abuzz with indignation in the aftermath of the violent removal of Vietnamese-American Dr David Dao from a United Airlines flight when he refused to give up his seat after being selected for rebooking.

The story has become a global trending story, and has landed United in dire PR straits as the company faces a backlash and almost a US$1 billion loss in value as a result.

Setting aside the legality of United’s actions, the conduct of Dao and the company’s ham-fisted “apology”, the story provides interesting insights into the nature of viral marketing and viral public relations failures, particularly in Asia. Criticism of United ranges from bad customer service up to institutional racism, with both points becoming blended together in Asian media coverage.

To that end, a key player in this unfolding saga has been China, or rather Chinese netizens.

Confused facts spark social media wildfire

It is important to note that while international condemnation across Asia, such as in Vietnam, can be attributed to their connections to the – for lack of a better term – “Western” social-media network, the reaction in China is different. Despite a tightly controlled domestic social-media environment in China, the United scandal has nevertheless spread like wildfire there, with some 700 million views and 280,000 comments on Weibo. On April 11, #UnitedForcesPassengerOffPlane was generating 20 million views an hour on Sina Weibo during the afternoon.

Alec Peck, of Hill & Knowlton Strategies, raises an important point by noting: “That this developed into a social-media storm in the West and China almost independently of each other should be a lesson to many companies.” The viral nature of the United scandal is reminiscent of previous (generally geopolitically motivated) social-media outrages, notably the recent backlash against all things South Korean in the wake of Seoul’s THAAD (Terminal High Altitude Area Defense) missile-system deployment.

What the scale of China’s anger also highlights is the fast and loose use of facts in such social-media storms, with as-it-happens reporting leading to misconceptions, presumptions and eventual retractions. Chinese netizens took to social media to decry the treatment of Dao, loudly complaining about American racism toward people of Chinese descent. Ordinary citizens and celebrities alike made impassioned boycott pledges, with some, including Hong Kong politician Charles Mok, cutting up their United Mileage Plus Explorer cards in protest.

Other prominent voices were the chief executive of e-commerce giant JD.com, Liu Qiangdong, who recalled his own multiple “nightmarish” experiences with United, and Gao Xiaosong, co-founder of Alibaba Music Group, who wrote that “from the ground to air, United’s arrogant service attitude is so horrifying that I have never booked flights since I’ve experienced it twice [sic]”.

Moreover, a petition started by a London-based Chinese student sporting the hashtag #ChineseLivesMatter calling for an official investigation into the incident has already garnered 191,000 signatures. All this happened before it was determined that Dao is Vietnamese, not Chinese. This misconception was only further propagated by official Chinese media outlets, with the Global Times warning of fallout and financial losses for United in China, all while maintaining that Dao was Chinese.

A Global Times infographic mistakenly claiming Dao is Chinese

A Global Times infographic mistakenly claiming Dao is Chinese

“For a public that assumes anything bad that happens to a Chinese person overseas is because of racism, this was a lit match on a pile of kindling,” argued James Palmer, writing in Foreign Policy. While the discovery of Dao’s Vietnamese origins has dampened the social-media storm in China somewhat, his treatment remains a viral rallying call that has switched to greater concerns about discrimination against Asians in general.

This has mirrored responses in the United States, specifically from the Asia Pacific American Labor Alliance, whose national president Johanna Puno Hester described the incident as “a needless act of brutality yet again against a person of color”.

Interestingly, the United scandal’s social-media profile exhibited an opposite trajectory in Vietnam. As reports of Dao’s Chinese ancestry accompanied his story, the issue received a muted response in Vietnam. Given the country’s clashes with China in recent years, as well as its millennia-long history of animosity with the Middle Kingdom, Vietnamese social-media users were not quick to denounce the US over its treatment of a Chinese man.

That being said, once it emerged that Dao was Vietnamese after all, Vietnam’s social-media scene exploded with a torrent of hate for United. Many Vietnamese have described Dao’s treatment as racist and deplorable, and have called for a boycott of the airline. The fact that United has no direct flights to Vietnam was lost in the furor – another example of the kind of immediate, emotional reactions that social media (for better or worse) allow.

US-China aviation market

This is not the first time that a US company has been on the receiving end of Chinese social-media-driven outbursts, but in this case it highlights how even erroneous information can spark such events, with potentially dire results for United. With passenger volume on China-US routes growing by 30% year on year in 2016, these stretches have become the fastest-growing (and one of the most lucrative) connections for US airlines. These so-called “golden routes” earned United $2.2 billion in 2016, some 6.1% of its total revenue, and almost double that of its main competitor, Delta.

United’s expansion plans have seen it establish connections to Beijing, Shanghai, Hangzhou, Chengdu and Xian, potentially exposing the airline to significant backlash. Shirley King, president and partner at Shanghai AtComm Consulting believes that “the bookings for routes between China and the United States and [United’s] market share will certainly decline”.

The nature of the Chinese airline sector also presents complications.

Currently, bilateral agreements limit the number of round-trip flights to China by US carriers to 140 per week (Chinese airlines are allotted 180). This system benefits established carriers like United, whose pressure has helped stall efforts to open up the market for years. This arrangement means that a certain degree of United’s market share is guaranteed, as other US airlines cannot quickly absorb all the company share. This acts as a buffer, especially given the flash-in-the-pan nature of such social-media storms.

On the other hand, this limited number of flights could harm United if competitors such as Delta can capture angry consumers and instill new purchasing habits. If this were successful, the limited flight quota would make it hard for United to claw back its lost market share.

Had this occurred close to or during one of the Chinese Golden Week holidays, the impact could have been much worse, as snap decisions could have led many consumers in China and abroad to cancel or switch. Fortunately for United, this story is unlikely to have sufficient staying power to maintain a backlash until the October National Week holiday season.

If United can avoid losing market share to other US carriers, the medium-term risks will be minimal, as social-media-driven boycott pledges quickly fizzle out, and as Chinese consumers remain too practical and quality-oriented to let such rallying cries impact their spending habits in the long term: think of the continuing popularity of Apple despite being successively buffeted by such storms.

The operative word here is “quality”, as Chinese airlines continue to been seen as worse than US ones by many Chinese consumers. Incidents of air rage are common, and staff on Hong Kong flights have been given mandatory martial-arts training to deal with unruly passengers. That being said, if United gains a reputation for poor-quality service, consumers will look elsewhere, especially as Chinese travelers grown more numerous, discerning and wealthy.

The viral nature of the scandal makes the issue a PR nightmare for United and a viral marketing gold mine for rival airlines. Qatar Airways has already taken a shot at United on Twitter, and Emirates unveiled a punchy ad using United CEO Oscar Muñoz’ own words against him to showcase its 2017 travel awards. As of writing, the ad has more than 900,000 views on YouTube.

Right now United bashing is a free and effective image booster, so much so that even unlikely individuals such as New Jersey Governor Chris Christie have jumped on the bandwagon. Polled as America’s most unpopular governor, Christie has touted his efforts to persuade President Donald Trump to ban the practice of overbooking, trying to boost his image at the expense of one the few things currently less popular than him.

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