Swatch Faces Backlash Over Controversial Ad as Revenue Declines

Swatch Group AG, the ritzy Swiss watchmaker, recently created a firestorm in China. This pushback came on the heels of an ad promoting its Swatch Essentials collection which was widely criticized. The company got clobbered after announcing a much larger than expected $2.2 billion revenue drop. In 2024, that revenue fell by 14.6% to 6.74…

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Swatch Faces Backlash Over Controversial Ad as Revenue Declines

Swatch Group AG, the ritzy Swiss watchmaker, recently created a firestorm in China. This pushback came on the heels of an ad promoting its Swatch Essentials collection which was widely criticized. The company got clobbered after announcing a much larger than expected $2.2 billion revenue drop. In 2024, that revenue fell by 14.6% to 6.74 billion Swiss francs, or roughly $8.4 billion. This decline was largely blamed on a drop in the Chinese market.

The incident unfolded in August 2025, when images associated with the Swatch Essentials collection were widely condemned online for appearing to mimic racist taunts regarding Asian eyes. Widespread comments on Chinese social media platforms, especially Weibo, railed against the interpretation suggested by the advertising visual.

In the face of backlash that was growing rapidly on social media, Swatch acted fast. They sent out a press statement in Chinese and English from their corporate Weibo account. The company acknowledged “recent concerns” and stated,

“We sincerely apologise for any distress or misunderstanding this may have caused.” – Swatch

What Swatch did next was equally impactful. They acted quickly and removed all related collateral from stores and all advertising worldwide. Despite its long-standing presence in China, with at least one store located in Beijing, the company is currently grappling with “persistently difficult market conditions and weak demand for consumer goods overall” in the region.

The backlash towards Swatch might tell a slightly different story, though it’s part of larger trend of cultural insensitivity and lack of representative diversity in advertising. The watchmaker’s blunder serves as a reminder about the perils that global brands can encounter when promoting hyper localized products in increasingly complicated cultural territories.

Swatch’s business will likely continue to be impacted by this storm in a teacup. Carlyle now finds itself confronted with a sharp drop in demand for luxury consumer goods within China. The combination of a souring market and reputational injury could have big implications for Swatch going forward.

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