Swatch sees drastic drop in brand sentiment as it files lawsuit against MY govt: Is the fight worth it?

Swatch Malaysia has been making headlines ever since the Malaysian government seized watches from its Pride collection earlier this year in June, where the brand’s explicit advocacy of the LGBTQ+ community landed it in trouble with conservative authorities. What was believed to be the end of the unfortunate incident, has now welcomed another update. The brand filed a lawsuit against the Malaysian government and home ministry officials this week and as a result, Swatch's brand sentiments have dropped severely.

Earlier this year, authorities from Malaysia’s Ministry of Home Affairs raided several Swatch stores and confiscated 172 rainbow-coloured watches worth a total of US$14,000 from its Pride collection. Swatch is now seeking compensation and the return of the watches, claiming that the home ministry’s officers acted illegally and irrationally and that their actions were allegedly disproportionate and for an improper purpose, as reported by Malay Mail.

Shortly after the incident, Swatch’s CEO, Nick Hayek Jr said that they strongly contest that the collection of watches using rainbow colours and having a message of peace and love could be harmful to anyone. “On the contrary, Swatch always gives a positive message of joy of life,” he added. Now, with the lawsuit against the government, it is apparent that the brand is standing its ground regarding its values despite being attacked for it in the public eye.

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However, does this stand to help or hurt the brand? Media intelligence company, CARMA, stated that over the past day and since the news of the lawsuit broke, Swatch has received 33.9% negative sentiments and 0% positive ones. 

What does Swatch’s reaction mean for the brand?

When the news of the confiscation initially broke, Lars Voedisch, managing director at PRecious Communications said that there is no such thing as bad publicity. “At the end of the day, Swatch got the attention from traditional media and social media from around the world – and that might help to position the brand even better amongst its target audiences," he said. 

Additionally, he teased the question, “Was it a real debacle – or an anticipated or possibly even a desired response?” With regards to this question, Voedisch referenced other famous brands that proactively aimed to provoke societies, which walked away from their respective snafus with greater publicity and attention. For instance, he cited Nike's Heroes campaign starring NFL star, Colin Kaepernick who protested America’s gun laws by kneeling during the national anthem.

However, regarding Swatch’s lawsuit, he believes that the company is standing up for its right to sell its products, with or without a direct message. This shows its target audience that its advocacy is not performative, where the outcome does not matter as long as they are seen as fighting the good fight. The returns of doing so can be seen in the long term. 

“At the end of the day it is about the freedom of expression versus the perceived and enforced cultural norms of a society. As such norms are often not fully explicit, the outcome of such a trial is highly unpredictable," he said, adding:

However, by filing a lawsuit, the brand makes it clear that it is willing to fight for its values.

Archana Menon, country manager at Mutant Communications, agreed by noting that it is important to approach such matters with sensitivity in markets where local culture conflicts with diversity efforts. “As things stand, it is important for everyone involved to engage in open and constructive dialogue as they seek to promote greater understanding and find common ground,” she explained.

Should brands in conservative societies then remain true to their values and be proactive advocates?

So should brands in conservative societies continue to remain true to their values and be proactive advocates or adhere to the values of a country? Voedisch noted that we are seeing a global adjustment of brands' approach towards audiences.

“At the end of the day, you have two main camps - those that try to sell their product potentially to everyone, and obviously they try to stay away from any controversy; and then you have those who are clearer on what they stand for beyond their products and services - and they don't shy away from also shouting out about it, accepting criticism and even pushing away potential customers,” he said.

He provided the caveat that there is quite a spectrum of controversy one could willingly or unwillingly want to create, from becoming the talk of town to public smashing products or even losing business licenses.

“But in the end, I believe as customers we also expect that strong brands have a strong position of what they stand for - or not.”

Menon concurs. However, she does think that if brands in conservative societies intend to stay true to their values, they must prepare ahead of time and adopt more nuanced messaging to avoid toeing the line of controversy.

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Swatch sees brand sentiments dip following LGBTQ watch seizure: Was it to blame?
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