KFC is in hot water in China - for the umpteenth time. The fast food giant, which was once a textbook case of how to win in the Chinese market, has taken a solid battering in recent years. The issues have ranged from food safety and supplier concerns to plain consumer fatigue with the brand, leading to a dramatic drop in sales.
This time around, however, the beleaguered fast food chain is in trouble not because of something it did (or did not do), but because of a practice known as dark PR. A couple of days back, a series of posts on WeChat said the fast food giant used genetically modified chickens with six wings and eight legs. The posts also carried images of said chickens, beautifully Photoshopped of course.
The posts went viral. There were at least 4,000 subsequent posts that were supposedly read over 100,000 times, the company claimed later.
In China, food safety is a big concern. The melamine-tainted-milk scandal in 2008, which killed many children, sparked nationwide outrage. Ever since, food safety issues have been top-of-mind for most citizens and rumours like this spread in no time.
For KFC, the rumours about mutant chicken appear to have fizzled out for now. KFC's parent company, Yum Brands, has filed a lawsuit against the three companies who supposedly started the rumours on social media and has demanded an apology and compensation.
Companies doing business in a foreign land routinely run into dark PR, as KFC did, where competitors may try to run you down by floating negative rumours about you.
Somewhat reminiscent of the Maggi episode--though there is no indication so far that it is a victim of dark PR--a brand of instant noodles called Master Kong found itself battling an unprecedented problem in 2012 during China’s territorial dispute with Japan over the Diaoyu Islands in the East China Sea. Even as the two countries exchanged hot words over the islands, someone (rival Uni-President, according to Master Kong) floated a rumour on Weibo, China’s Twitter equivalent, that Master Kong was actually owned by Japanese investors and that the company had donated money to the Japanese government to buy the disputed islands. Even though the company was quick to respond to these allegations, the damage was done. The share price tanked.
In any country, foreign and even local companies routinely become victims of dark PR. But what should you do if you are the target of such a campaign?
Be Transparent: Honesty goes a long way. Be responsive and share information on your company and processes in an open manner. Open the doors for audits by the relevant official authorities. The worst thing you can do at such a time is be secretive. It will only fan the rumour flames further.
Deal with Concerns: If there are genuine concerns, apologize and deal with them proactively. Last year McDonalds and KFC, among other food chains in China, got into trouble because the Chinese subsidiary of OSI Group, their meat supplier, was supposedly selling expired beef and chicken. McDonalds was quick to take the tainted items off the menu. I remember going to McDonalds at that time and the only things you could order were the fish burger, French fries, ice creams and beverages. Both McDonalds and KFC apologized, dropped that particular supplier, and promised to boost supplier audits. Be humble. No apology is too big. Even Apple CEO Tim Cook himself apologized to Chinese consumers over customer service and warranty policy complaints.
Do Not Retaliate Similarly: When hit with such a rumour by a rival, it is very tempting to hit back by planting similarly damaging rumours about the rival. Any such action can only come back to bite you because these practices are, at the end of the day, illegal. Play clean. Don’t throw out the rulebook.
Fight It with Humour: If anything can take the bite out of a venomous attack, it is humour. A humorous response is more likely to go viral on social media than a staid statement saying, "We refute XYZ." In the eight-legged chicken case, KFC has responded by saying that it would be impossible to create a chicken with eight legs and six wings and if KFC does manage to do so, it should get the Nobel Prize. That most certainly guarantees a retweet.
Build a Stronger Brand: Starbucks got into trouble in China last year after a China Central Television (CCTV) report accused it of selling pricier coffee in China. CCTV routinely does such reports on multi-national companies in China and everyone from Carrefour to Apple have been caught in its web. This report specifically said that a tall latte at Starbucks in Beijing costs Renminbi (RMB) 27, at least one-third higher than the price in the US. They accused Starbucks of exploiting the gullibility of their Chinese customers. While the higher prices in China are a function of higher costs and the company explained that, Starbucks emerged virtually unscathed from la affaire why-is-my-latte-so-expensive. Why? Because it is a strong brand in China and fans stood up for Starbucks on social media, effectively making CCTV look ridiculous.
A little maturity in dealing with rumours will go a long way. Rumours, after all, don't have legs - and definitely not eight of them.
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