Dolce & Gabbana's insincere apology posted to the brand's Weibo account.

Marco Polo, the most famous Italian to have traveled to China, lived and studied with and learned to understand the Chinese. It’s too bad he’s not alive today to give his fellow countrymen, Dolce & Gabbana, a lesson or two on the ways of the Chinese.

Dolce & Gabbana’s infamous marketing faux pas — a video promoting an upcoming Shanghai fashion show, in which a Chinese woman, intentionally portrayed as dim-witted, attempts to eat pizza, a cannoli and pasta with chopsticks — went viral on China’s social media. And the Chinese became mad as hell. Within hours, both brick-and-mortar and online stores took the brand’s clothing line off the shelves. Weibo, China’s version of Twitter, was littered with anti-Dolce & Gabbana sentiment: “Chinese are not stupid! We know how to eat pizza! Boycott D&G!”

The two owners made things worse when they posted a video on YouTube of what was widely seen as an insincere apology. The fashion show was canceled. The millions of dollars in revenue and costs they lost, and stand to lose in the future, over this blunder is not insignificant. Because one-third of Dolce & Gabbana’s total sales come from Chinese luxury consumers, loyalty will be hard to regain.

Hopefully, Dolce & Gabbana has learned a few lessons on what not to do when selling in China.

For one, why is such a large multinational company still running its China sales and marketing though its headquarters in Italy? As big as China’s markets are today, foreign companies need to run China in China by Chinese. Gone are the days when a marketing department in Omaha or Milan, can decide what and how to sell in China. Dolce & Gabbana would be in a totally different situation today if only it had run the ads through their local China staff or at least had done a market focus study with Chinese consumers.

Second, their apology didn’t get to the crux of why the Chinese were so mad. For centuries, foreigners have discriminated against the Chinese. The Dolce & Gabbana video brought back memories of a time when foreigners looked down on the Chinese, treating them as second-class citizens and colonizing their homeland. China is now a world power, and its citizens will no longer kowtow to Westerners or be a punchline to their culturally insensitive jokes. Dolce & Gabbana’s two owners, Stefano Gabbana and Domenico Dolce, failed to understand China’s history and the Chinese people’s sensitivity to how the world sees them.

There’s nothing new here. When doing business in China, all companies, big or small, go through a formative phase, and there are often growing pains. The multinationals — including Ford, Caterpillar, Philips and Volkswagen — all made similar mistakes. The difference is that we now have social media to spread the news of every mistake a company makes. Whether Dolce & Gabbana will be able to regain the hearts of the Chinese, and dig itself out of this very big hole, remains to be seen. But their faux pas underscores the importance of understanding the culture of China before trying to do business there.

Stanley Chao is author of “Selling to China” and managing director of All in Consulting, a Los Angeles-based consulting firm aiding Western businesses in their Asia and China business developments.

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