For many years foreign companies operating in China have faced social media-fuelled consumer backlashes, sometimes over instances of cultural insensitivity and sometimes over political controversies.
“Anyone who offends the Chinese people should prepare to pay the price,” was the blunt message from China’s Foreign Ministry Spokeswoman Hua Chunying when asked recently about a number of Western companies facing a boycott after they expressed concern over alleged human rights abuses in Xinjiang province.
H&M was the main target, but the backlash also hit Nike, Adidas and Puma – all members of the Better Cotton Initiative (BCI), a non-profit group promoting sustainable cotton production.
The Swedish fashion retailer is blocked on China’s major ecommerce platforms and their physical stores have vanished from some digital maps. Twenty H&M stores remain closed.
These companies aren’t the first to face a backlash in China and almost certainly won’t be the last.
But the price of these transgressions seems to vary dramatically. The trouble blows over quickly for some companies, but causes lasting damage for others.https://buy.tinypass.com/checkout/template/cacheableShow?aid=tYOkq7qlAI&templateId=OTBYI8Q89QWC&templateVariantId=OTV0YFYSXVQWV&offerId=fakeOfferId&experienceId=EXAWX60BX4NU&iframeId=offer_0e763acc7b457c03340a-0&displayMode=inline&widget=template
The President of the EU chamber of Commerce in China Jeorg Wuttke said it was not uncommon for foreign companies to run afoul of Chinese sensibilities. It’s a longstanding challenge, and one that has grown with China’s economic importance and Europe’s changing attitudes.
“What has changed is that public perception and public opinion on China has dramatically soured. And that, of course, increases the heat on companies on the home front,” Mr Wuttke said.
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For some retailers like H&M, it’s a conundrum. Should they stick to their principles and risk of their business in China, or relent and offend their customers elsewhere?
At the moment, H&M sells 94.8% of its clothing elsewhere, but China’s growing wealth is likely to represent a large portion of the company’s growth in the coming years.
Mr Wuttke thinks the goal appears to be to inflict short-term pain to make a political point rather than to put companies out of business.
The boycotts are selective and most often target companies with a high-visibility retail presence, an approach which maximises the visibility of the backlash but also minimises the impact on China’s economy.