Nike might end up losing $4.5 billion in sales revenue. 😲
But how?
Didn’t you hear that they are being boycotted in China! 🤔
What??? Why?
Well, the story can’t be explained so simply, so get some popcorn while you scroll through!
❌ Just Don’t Do it
📉 Nike Stock Crash? Just do it.
Nike faced a huge backlash in China due to the issue which centers on the Xinjiang region of China, and allegations of forced labor in the cotton industry — allegations denied by the Chinese government.
But, how much did it impact the stock price of Nike?
Well, let’s do some numbers. So, Nike gets approximately one-fifth of its entire sales revenue from China. Now, imagine if that number suddenly becomes zero. It ended up impacting about 58% of the Nike share price. 🤯
㊙️ Xinjiang and the mystery that follows
What makes the northwestern Chinese region Xinjiang so special? It happens to produce about a fifth of the world’s cotton. Wow! Also, It is home to many ethnic groups, especially the Uyghurs, a Muslim minority.
💭 But what’s happening in Xinjiang?
The central government has become more involved in the region, claiming that it has to assert its control due to local problems with Han Chinese (the ethnic majority) coming into the area.
As a result, extreme restrictions, surveillance, criminal prosecutions, and forced labor camps could have been implemented.
💸 The Cost of Apparels
Through coercive labor programs, up to one million Uyghurs and other Muslim minorities have been retrained to become model workers and submissive to the Chinese Communist Party.
This has been going for a long time and has been reported in The New York Times, The Wall Street Journal.
So, how is it connected to American brands?
Adidas, Nike, H&M, and other global brands get their cotton from suppliers based out of Xinjiang.
🙋 But why now?
Well, it’s not really clear but there are a lot of reasons why this issue got picked up now.
One explanation is that it’s due to the intensification of political brinkmanship between China and the West. In an intensifying conflict over the treatment of Uyghurs in Xinjiang, Britain, Canada, the European Union, and the United States placed penalties on Chinese officials on March 22.
Nike came under the fire in China after it showed concern by issuing a statement against forced labor practices in the Xinjiang Uyghur Autonomous Region.
Chinese consumers believe that such practices do not happen and these brands are trying to disrupt the economy of Xinjiang.
Nike’s CEO John Donahoe came forward and put out a message that said, ‘A brand of China, For China.’ 😇
💰 Who’s gonna profit from this?
Well, the local Chinese brands will surely enjoy the absence of these global brands and have already seen a 20% increase in sales.
But, is it really what the China Govt. is saying?
What do you think? Comment below!
Tax, England Tax – Crazy Tax Story
Another tax on England! When will the British stop with their taxes? 😫
💭 Byte of The Day
Provident Fund – One of the most common forms of investment that helps you save on taxes
🤔 Wondering what happened to those goofy, odd & bizarre tax quotes? With the tax season knocking at the door, we thought, let’s talk taxes. 😉