Barbie falls flat in Shanghai

In 2009, Barbie was 50 and looking at 2008’s 9 percent sales decrease, a series of disastrous product launches and a negative growth rate in its traditional markets.

And, given Totally Stylin’ Tattoos Barbie had not made headway with middle class American parents (can’t imagine why), Mattel’s Barbie looked at China and its 1.4 billion people. Mattel concluded that Barbie and China were a match made in heaven.

Some $35 million later, Barbie opened a six-story, 35,000-square-foot flagship store in the high-rent district in Shanghai. The branding and design division of Ogilvy & Mather did the creative concept, location analysis and public relations. Slade Architecture worked on the exterior, interior, fixtures and furnishings.

The store, a cross between an American Girl Doll store, Wolfgang Puck, Gucci and Vidal Sassoon, offered design your own doll, a restaurant developed by Australian celebrity chef David Laris, a retail store where you could pick up $150 jeans or a $10,000 Vera Wang wedding dress or spend an afternoon getting spa and beauty treatments and products. If that wasn’t enough, you could look at the thousands of Barbies and their accessories, which I guess includes Ken dolls, buy some Barbie chocolates, sip a pink Barbietini and sing along to your favorite music in the karaoke bar.

Three years later in 2011, after dismal sales, the store closed.

What went wrong?

Mattel failed to understand that while Barbie was an institutional brand in America, it was not in China.

The Chinese reception to Barbie was favorable. Young Chinese girls liked the beautiful blonde doll, but it was not based on 50 years of culture and sales, it was just a foreign toy. In 2009, China was in love with Western brands, but the brands had to have an association with something they saw as desirable.

Mercedes, Bentley, Rolls Royce, Rolex, Chopard, Vacheron Constantin, Gucci, Prada and Chanel had advertising and cultural appeal, but 11-year-old Chinese girls, who did not read fashion magazines, were not familiar with Barbie’s status as an American cultural icon. To them, it was just a foreign doll of which there were many copies available.

Mattel did not understand that there were and are differences between American and Chinese girls, in terms of perception and culture. The aggressive, sexy image that Americans associated with Barbie was at odds with the Chinese desire for sweet and soft. The clothes and accessories were interesting but held little cultural significance for young girls who were immersed in Chinese stories and culture.

The standalone luxury store was an odd choice, given the audience Mattel was looking for. The vision of a wealthy upscale Shanghai mom enjoying a spa day with her daughter and plying her with dolls and accessories is at odds with family life in China, which does not follow the Beverly Hills 90210 lifestyle. Mothers and daughters are more likely to spend time with family members, at cultural events and at the zoo than shopping aimlessly.

Bling ambition

Mattel blindly tried to apply its American model to the Chinese market.

In 1999, Mattel released the Butterfly Art Barbie, which had a permanent tattoo on her abdomen. In 2002, Mattel released a pregnant doll – Barbie’s friend, Midge. The doll had an infant that could be removed from her midsection. In 2008, “Totally Stylin’ Tattoos Barbie,” a doll that came with a set of more than 40 tiny tattoo stickers and a fake tattoo gun, with wash-off tats that kids could ink themselves with, was released. For some reason, Mattel thought the edgy approach was the way to entice grandmother and parents to buy an 11-inch plastic doll for their tender-aged progeny. One mother from Texas summed it up, when she predicted the next Barbie would be the “Totally Pierced Barbie,” while other pundits predicted the “Divorced Barbie,” a doll which would have all of Ken’s accessories.

With these “successes” under its belt, it was time to look eastward to China, where Mattel’s research told it that grandparents and parents could not wait to buy plastic dolls, accessories and everything else at a luxury address in Shanghai. Keep in mind the average annual wage in Shanghai was about $5,500, and although sales for luxury items were huge and growing, it was based on the adult’s perception of status and luxury. Chinese adults had never owned or heard of Barbie.

Barbie was priced at $36. While that may not sound like a lot for an American family, add in clothes and accessories, and it’s a $100 to $300 investment.

Cheaper knock-offs

The standalone superstore was also competing against Mattel’s other department store outlets, where Barbies were less expensive. On top of that, cheaper, knock-off, look-a-like dolls sold for $1 to $3 were everywhere. A 6-year-old girl does not care about brands.

The second idea of trying to extend the brand to the older generation was even more interesting, especially given these people had never owned a Barbie. The idea that the Barbie brand could compete with luxury fashion brands whose image had been pounded into the brains of Chinese consumers through relentless advertising using one location in Shanghai was interesting.

The moral of the story? Understand your brand and what it represents to the market you are entering. Put the ego and hype in the closet and do not assume that because you have the big names advising you that they will steer you down the road to success. Big firms have big overheads and will rarely tell big clients they are crazy.

Clearly, Mattel was deluded. It thought it could take its show on the road, but China, like any market, is not a place to make big investments on wrong assumptions.

Einar Tangen, formerly from Milwaukee, now lives and works in Beijing, China. He is an adviser to Heilongjiang Province, Hebei Province QEDTZ, China.org.cn, China International Publishing Group, Beijing Baotong and DGI DESIGN. He is also a weekly public affairs commentator for CCTV News’ Dialogue and the author of “The Kunshan Way,” an economic development history of China’s leading county level city. While in Milwaukee, he was a partner at Jackson, Morgan and Tangen, president of E-Tech and a senior vice president at Stifel Nicolaus. He chaired various boards in Milwaukee and was a member of the Federal Home Loan Bank of Chicago. Readers who would like to submit questions or suggest areas of interest can send an email to steve.jagler@biztimes.com.

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