Assessing China’s Xinjiang Cotton Fallout
LONDON — China’s crackdown on companies that decline to back down from the issue of Xinjiang cotton continued to brew over the weekend.
H&M’s blackout treatment — which spanned e-commerce, mapping and ride-hailing platforms — now encompasses at least six physical stores closed in cities such as Urumqi, Yinchuan, Changchun and Lianyungang, with several of the malls citing it as landlord decisions. In a video circulating on Weibo, H&M’s billboards can be seen being removed from a mall’s facade, and the brand’s storefront logos being covered with A4 paper. The Swedish brand had 505 stores in China as of Nov. 30.
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Huawei on Monday said it has suspended downloads of sportswear brands Nike and Adidas from its app store, but Chinese users can still download those brands from other platforms, such as Apple.
Hugo Boss became the second luxury brand, after Burberry, to lose its local ambassadors Li Yifeng, Zhu Zhengting and Wang Linkai after it put out inconsistent statements.
The German brand earlier said on Weibo that it would “continue to purchase and support Xinjiang cotton,” but the post was later deleted. Hugo Boss told Bloomberg that comment was “unauthorized.” A separate statement on its website then said the company does not tolerate forced labor and “has not procured any goods originating in the Xinjiang region from direct suppliers.”
The kind of internal division was apparent at more than one organization as local branches face pressure to appease the official line of authorities in China. Wu Yan, the head of the Better Cotton Initiative’s Shanghai branch, said on China’s state broadcaster CCTV that their investigations showed “we haven’t identified one single case of forced labor.” This contradicted what its Geneva headquarters said last October when it was withdrawing from Xinjiang over concerns about the alleged use of forced labor by incarcerated Uyghur Muslims. WWD has reached out to BCI global headquarters for comment.
With more than 40 major Chinese celebrities cutting ties with some of the biggest fast-fashion and ready-to-wear brands, the local fashion industry is cautiously assessing the situation, with many self-censoring or laying low on partnerships with any of the involved brands.
For one, it’s unclear whether brands will pursue legal action against the stars for terminating their contracts. There are reports that Adidas is asking Hong Kong singer Eason Chan to pay 60 million renminbi, or $9.22 million, for dropping the brand. Chan was met with backlash in Hong Kong and Taiwan for his support of the use of Xinjiang cotton.
A publisher of a Chinese edition of an American fashion title told WWD under the condition of anonymity that the magazine has decided not to feature any of the involved brands in coming issues. Some photo shoots are being replanned as well.
The recent actions will have a major impact on these brands’ event planning throughout 2021, a founder of a Beijing-based communication and production agency said.
China has become the market for global product debuts since the pandemic, but now brands such as Nike, Adidas, H&M, Uniqlo, Converse, Puma, Calvin Klein, Tommy Hilfiger, New Balance, Burberry and Hugo Boss will find it difficult to lock down celebrities, influencers and editors to attend their events, and landlords may not lease space to them, the person added.
For example, Nike’s annual Airmax Day event, which was last Friday, was canceled in Shanghai, as was a Puma event. A Wolford collaboration with Adidas, which had just debuted, was also pulled off shelves and e-commerce sites. Streetwear retailer Clot has also said it would delay its highly anticipated sneaker collaboration with the brand it was meant to unveil on Saturday. However, there was still strong direct consumer demand for Nike with the special releases of Air Jordan and Dunk Low tied to Airmax Day saw more than 340,000 people signing up for the raffles on its Tmall store.
Also finding it hard to cut ties with these brands are Chinese sports teams. With the Tokyo Olympics only a few months away, Chinese sports stars have largely remained silent. Last year, Nike signed a 12-year deal with the Chinese Athletic Association, and the brand also has deep ties with China’s national soccer and basketball teams.
Last Friday, the Biden administration accused China of “a state-led social-media campaign and corporate and consumer boycott against companies, including American, European and Japanese businesses.”
“We commend and stand with companies that adhere to U.S. laws and ensure that products we are consuming are not made with forced labor,” State Department spokeswoman Jalina Porter said during a news briefing.
“We support and encourage businesses to respect human rights in line with the U.N. guiding principles on business and human rights and the OECD guidelines for multinational enterprises,” she added.
On Monday, Xu Guixiang, a Xinjiang government spokesman, urged businesses not to “politicize economic behaviors.”
“China is no longer the China of 1840, and the era when Chinese people suffered from great power hegemony, and bullying will never return again. We hope that businesses like H&M will be more clear-eyed and distinguish right from wrong,” he added.
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