From Japanese cars to NBA, China’s consumer Boycotts are no joke. 🙅♀️
So, what happened NOW? H&M, Adidas, Nike, Zara, and many other brands are facing boycotts in China.
The entire charm 🌟 of selling in China is the country’s population i.e. 1.3 billion & the size of its middle class i.e. 400 million. But the fate of brands of a foreign company can change overnight. There are many reasons, the most important ones being geopolitics and consumer sentiment. 🤔
🏭 Xinjiang – China’s Cotton Factory. The City dominated by a Muslim Uyghurs population produces more than 90% cotton in China & 20% of the world’s cotton. This enormous production is believed to be the by-product of forced labor which then makes its way into the supply chains of international corporations.
📢 A Year-Old Statement by H&M said it is “deeply concerned” by the allegations and that it does not source products from Xinjiang. On March 22. The EU, US, UK, and Canada announced coordinated sanctions against individuals involved with forced labor camps in China’s Xinjiang region.
🔥 Weibo aka China’s Twitter – Set on Fire. “Spreading rumors to boycott Xinjiang cotton while trying to make money in China? Wishful thinking!” The Communist Youth League wrote in a post on Weibo – while sharing an image of a statement on the issue that H&M published in English last year.
As of Thursday, the Weibo post had been liked over 400,000 times. 😮
💰 The Price. These allegations put multinational clothing brands in a sensitive position. Many companies in clothing, footwear, and other industries tried to distance themselves from ties to Xinjiang. But they risk angering Beijing, which has a history of mobilizing citizens to punish foreign companies that take positions opposing its own.
The costs can be high.
🚫 The Ban. The consumers in China are burning Nikes and shutting down H&Ms. Celebrities are dropping their endorsements with brands. And advertisements are done for! The other brands which are suffering are Zara, Adidas, Burberry, etc.
Since 2017, Italian fashion house Dolce & Gabbana, the NBA, the English Premier League, Apple, South Korea’s Lotte, Japanese cars, and even model Gigi Hadid have suffered some form of boycott in China, typically over an issue of national pride.
🛒 Silver Lining of Local Brands. For these Western megabrands, the Xinjiang cotton dispute is a big challenge that could help their Chinese competitors.
HeyTea, a $2 billion milk tea start-up with 700 stores, wants to replace Starbucks. Yuanqisenlin, a 4-year-old low-sugar drink company valued at $6 billion, wants to become China’s Coca-Cola. Ubras, a 5-year-old company, wants to replace Victoria’s Secret with the most non-Victoria’s Secret of products: unwired, sporty bras that emphasize comfort.
While previous outrages passed pretty quickly, this clash could linger.
Italian shop owners in Conegliano have to pay taxes on “shadow.” 😵 Created in 1993, was supposed to be enforced throughout all of Italy. But only the Conegliano authorities accepted it. Shadyyyy!