Blunder of the Week: Gucci

Paper handbags and shoes with the Gucci logo in a Hong Kong shop

Luxury brands are aggressively wooing the Chinese market, lowering prices on the mainland, and having Putonghua-speaking staff in boutiques around the world.

But earlier this week Gucci hit out at companies in Hong Kong selling fakes of the Italian uber cool brand -- for the dead.

Let me explain: Those who are Buddhists believe in the afterlife, and that loved ones on earth must send paper offerings to them in the next world by burning them.

Burning "money" to send to the dead in the afterlife

Traditional items would be paper clothes and money, known as hell notes, gold papers that are folded to look like gold ingots and other combustible items of significance.

In recent decades, paper offerings have evolved to include cars (with chauffeurs), homes, watches and mobile phones -- all made of paper. And in the last few years, the name brands of these offerings were more prevalent, like Mercedes-Benz, Rolex, iPhone, and Gucci, and Louis Vuitton.

So you can imagine six small shops in Hong Kong that sell these items were shocked to receive angry letters from Gucci, demanding they stop infringing on the Italian brand's trademark. The items were only going to be burned up anyway. And what if the deceased was a loyal Gucci customer?

After word got out in the media mocking the luxury brand for going after these shops selling paper offerings, Gucci made an about-face on Friday and apologized for sending out the letters.

The fashion house acknowledged the stores had no intention of infringing on intellectual property rights, and promised not to pursue any legal action.

Even paper cars complete with chauffeurs can be offerings

"We regret any misunderstandings that may have been caused and sincerely apologize to anyone we may have offended," the company said in a statement, explaining that the letters were sent as part of efforts to protect its global trademark.

If the company was smart, it would have asked its local Hong Kong staff about these items and their cultural significance, and then this big PR faux-pas would never have happened.

But it did, and thankfully Gucci has gracefully bowed out.

This incident illustrates how the Italian brand hasn't really done its homework in terms of getting to know one of its important markets.

It does now...