“This dispute is Kafkaesque. It is the first time that reactions in China are simultaneous, between the Communist Youth League (linked to the party that governs the country), online sales platforms, consumers and influencers, ”sums up à France-Presse Agency Eric Briones, co-founder of the Paris School of Luxury.
The cause of the conflict is cotton: 20% of world production comes from China, mainly from the province of Xinjiang, inhabited mainly by Uighurs, a Muslim minority repressed and exploited by Beijing, according to human rights activists – something the Chinese government denies.
Last week, after the United Kingdom, European Union, United States and Canada sanctions against China for its treatment of Uighurs, the Chinese social network Weibo recorded several messages that recalled the commitments announced in 2020 by several giants in the textile industry, such as H&M, Nike and Uniqlo, not to buy cotton from Xinjiang.
This was the starting point for a boycott campaign against Nike, H&M, Adidas and Zara, among other brands.
Some products from these companies have been pulled from the main Chinese online sales platforms. At the same time, actors and singers announced that they will no longer be ambassadors for the image of these Western groups.
“If it is a committed brand and decides to take a step back, it loses all credibility. And if the position is maintained, the company is deprived of the Chinese market, which is the heart of the world economy,” says Eric Briones.
“But, if these brands need China, does China need them?” Asks the analyst, who cites the example of Nike, whose quarterly sales grew 51% in the Asian giant and only 3% worldwide.
Crucial to the luxury sector, the Chinese market is also central to low-priced fashion, the so-called “fast fashion”, and sportswear.
The sports clothing of Nike and yes Adidas are sold in thousands of stores across the country. Last year, the American group recorded 18% of its annual turnover in “Greater China” (including Hong Kong and Macau).
China is the fourth main market for the Swedish group H&M, which in the country opened more than 500 stores and registered almost 280 million euros in sales in the last quarter of 2020. Its great rival, the Spanish group Inditex, Zara’s parent company, has 337 stores in the country.
“China surprised the world with this dispute: this shows that the international political pressure is beginning to bear fruit. It is clear that it is a intimidation to see how far the brands will be able to reach,” said Nayla Ajaltouni, coordinator of the Ethics collective on Tag.
Ajaltouni is the representative in France of the international coalition End Forced Labor in the Uyghur Region (“Ending Forced Labor in the Uighur Region“, in free translation), which brings together 180 NGOs and unions and asks in a statement to the brands that” they do not change their principles on human rights to preserve a commercial advantage “.
The coalition said that after Chinese boycott calls, some brands “backed down” in their commitments on forced labor, withdrawing press releases, or changing their positions. One is the Inditex group, which failed to specifically mention Xinjiang in its “zero tolerance” principles published on its website, according to the group that fights forced labor in the region.
Although the H&M has declared that it does not support “any political position”, most brands remain silent, waiting for the moment to pass. One of the few that took sides was the Italian clothing chain OVS, owner of 1,750 stores. On Friday, the group announced that it would stop buying cotton from Xinjiang and asked other companies to “not give in to pressure and choose their field: human rights, or commercial interests”.
“It is necessary to remain calm, since the boycott is digital at the moment, and physical stores are open,” said Briones.
The analyst recalls that “at the moment, this does not affect the luxury sector, only ‘fast fashion’ and sportswear, sectors in which Chinese brands are increasingly strong”. Some, like Anta, or Li Ning, went up on the Hong Kong Stock Exchange and recorded the highest price in a month. /AFP
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