A Hermes designer bag can illustrate this point very clearly: the "Sister Guo incident."
The green Hermes bag in question was bought for Sister Guo in Beijing this past February by a family friend, Wang Jun, somewhat of a father figure to Guo. The luxury bag cost 168,000(RMB). In a flash of vanity, one moment Sister Guo was showing off her new Hermes bag online, and the next a charity had lost half its value.
Prior to the incident, Sister Guo had made a habit of flaunting her designer products and luxurious lifestyle online. Post-incident however, Guo took to her Weibo account to profess she in fact never held a general manager position of high standing with the Chinese Red Cross – a designation she had previously included in her Weibo profile.
Guo and the Red Cross put out commercials and made statements to set the story straight, but the damage was done and the image of a "Red Cross official" finding the means to buy such a luxury product was already burned into postings across China's social media networks. One 168,000(RMB) bag left the Chinese Red Cross half a billion RMB short in donations when compared to the levels of the previous year.
Between March and May this year, the Chinese Red Cross received donations of 6.26 billion RMB. After the Sister Guo incident came to light in June, donations between June and August dropped to 840 million RMB, a fall of 86.6%.
Because of one young lady's taste for luxury and her desire to flaunt it, the charitable organizations of China will be feeling the pain for a long time, and after the accumulation of emotion, it remains to be seen when donations will pick back up.
The Sister Guo incident triggered many questions for society to answer – including those of the origin of the money, potential misuse of charitable contributions, and a destroyed image – and the results were not positive.
According to Ren Zhouting, Executive Director of the Luxury Goods Research Center at the University of Business and Economics in Beijing, Hermes has now become the symbol of vanity in China. It is not the bag itself that is the problem, but people like Sister Guo, and government officials, CEOs, and everyone in society who feel they have to use luxury products to prove their identity.
