Swiss watchmaker Swatch found itself in the eye of a storm this week after an advertising campaign for its Essentials collection sparked outrage among consumers in China and beyond. The controversy erupted when an image surfaced featuring an Asian male model pulling the edges of his eyelids upward and backward with his fingers—a gesture widely recognized as derogatory and racist. The image, first reported by Swiss public broadcaster SRF, was quickly circulated online, prompting a swift and global backlash.
On August 18, 2025, Swatch responded by issuing an apology and announcing the immediate removal of all related materials worldwide. The company posted statements in both English and Chinese on its official Instagram and Weibo accounts, acknowledging the concerns raised and expressing remorse for the incident. "We sincerely apologise for any distress or misunderstanding this may have caused," Swatch wrote on Instagram, adding that it would "treat this matter with the utmost importance." The apology was echoed on Weibo, China’s leading social network, in both languages to reach the broadest possible audience.
Despite the company's efforts to contain the fallout, the apology did little to quell public anger. Many social media users, especially in China, criticized Swatch’s statement as evasive, arguing that describing the incident as a "misunderstanding" sidestepped the company's responsibility for the offensive imagery. Commenters questioned how such an ad could have passed Swatch’s internal review process and made it to a global release, given the sensitive nature of the gesture depicted. The skepticism was palpable, with many demanding more than just a perfunctory apology.
"How did this get approved?" asked one Weibo user, reflecting a sentiment echoed across both Chinese and international platforms. Others argued that Swatch’s response failed to address the deeper issues of cultural awareness and corporate accountability. The controversy has reignited broader conversations about representation and the responsibilities of global brands operating in diverse markets.
Swatch’s troubles don’t end with public relations. According to SRF and other financial outlets, the company’s share price has been in a steady decline since a sharp peak in late July. The timing of this advertising misstep could hardly be worse for the Swiss watchmaker. On August 18, Swatch shares traded in a range between 138.20 CHF (€146.74) and 139.55 CHF (€148.17), with trading volume down by around 22,000 shares compared to previous days. The stock has declined in six of the last ten trading days, falling by 4.3% on the day the apology was issued. This downward trend signals potential volatility in the near term, as investors react to both the company’s financial performance and its handling of the controversy.
The financial woes are not limited to the recent backlash. Swatch’s sales in the first half of 2025 fell short of analyst estimates, largely due to sluggish demand in China—its key market. The disappointing performance in the region has already weighed heavily on the company’s bottom line, and industry analysts warn that the latest incident is likely to further erode consumer trust and sales prospects. As one market observer noted, "Sales will certainly not be boosted by the backlash over the racist commercial."
The Essentials collection was intended to showcase Swatch’s commitment to accessible, stylish timepieces, but the campaign has instead become a case study in how cultural insensitivity can backfire spectacularly. The gesture depicted in the ad has a long history as a racist trope, used to mock people of Asian descent. For many, seeing it in a high-profile global campaign felt like a step backward in the ongoing fight for greater representation and respect in advertising.
Swatch’s rapid removal of the campaign materials was, in some ways, a textbook crisis management move. The company acted quickly to limit the spread of the offending image and communicated directly with affected communities in their own languages. However, the substance of the apology—and the perception that Swatch tried to frame the incident as a mere "misunderstanding"—left many dissatisfied. Corporate apologies in the digital age are scrutinized for tone, content, and sincerity, and Swatch’s response is being held up as an example of what not to do when addressing issues of racial insensitivity.
Some industry experts argue that the controversy points to deeper systemic issues within Swatch’s internal processes. "It’s hard to believe that no one in the approval chain flagged this as problematic," said a branding consultant who asked not to be named. "When you’re operating in global markets, you need to have diverse voices at the table—not just to avoid mistakes, but to build campaigns that truly resonate." The consultant noted that the incident could serve as a wake-up call for Swatch and other multinational brands to reassess their review procedures and invest in more robust cultural competency training.
While Swatch has not detailed the steps it will take beyond removing the campaign and apologizing, the company did state that it is treating the matter with "the utmost importance." Whether that will be enough to restore consumer trust—especially in China, where the company’s fortunes are closely tied to public sentiment—remains to be seen. The damage to Swatch’s reputation may have immediate financial consequences, but the longer-term impact will depend on how the company chooses to engage with critics and rebuild its image.
The Swatch controversy is the latest in a series of high-profile missteps by global brands attempting to navigate complex cultural landscapes. In recent years, companies from fashion to technology have faced backlash for campaigns or products seen as insensitive or tone-deaf. The stakes are especially high in China, where consumer boycotts and social media firestorms can quickly translate into lost sales and lasting brand damage. For Swatch, which has long relied on China as a growth engine, the timing could hardly be worse.
As the dust settles, the watchmaker faces tough questions about its internal culture and its readiness to operate in an increasingly interconnected world. The lessons from this episode are clear: in today’s global marketplace, cultural awareness is not just a matter of good manners—it’s a business imperative. Brands that fail to recognize this do so at their own peril.
Swatch’s experience serves as a stark reminder that in the age of instant communication and global commerce, a single image can upend years of goodwill. How the company responds in the coming weeks—beyond apologies and damage control—will determine whether it can regain the trust of consumers and investors alike.
