Swedish fashion giant H&M saw sales decline in China months after being targeted by a Chinese boycott.
H&M was one of the brands raising concerns about alleged human rights abuses against Uighur Muslims in China’s Xinjiang Province.
His testimony caused celebrities to sever ties with the brand and e-commerce platforms to leave H&M.
The slump in sales even came as H & M’s global business returned to profitability as the effects of the pandemic wore off.
China accounted for about 5% of the retail company’s sales last year and is one of the largest suppliers.
H & M’s sales in China declined 23% in local currency in the second quarter of 2021 compared to the same period last year.
“With regard to China, the situation remains complex. In addition, we are referring to what we said earlier, ”said CEO Helena Helmersson when H&M first quantified the effects of the boycott.
It happened when the world’s second largest fashion retailer reported stronger-than-expected pre-tax profit of $ 420 million (£ 305 million) for the quarter, after a loss in the same period in 2020.
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Why was H&M boycotted in China?
Several Western brands, including H&M and Nike, recently faced backlash from Chinese buyers after companies raised concerns about the alleged use of Uighur forced labor in cotton production.
In March, H&M was removed from China’s online retail platform Tmall and domestic phone manufacturers’ app stores after raising concerns about the alleged use of Uighur forced labor in cotton production.
However, later in March, H&M said it was aiming to regain the trust of customers and partners in China and that its commitment to the country remained strong.
Last week, the Nike boss, who was also faced with a boycott in China, vigorously defended the sportswear giant’s business in the country.
“Nike is a brand for China and for China,” said Chief Executive John Donahoe when asked about competition from Chinese brands.
Donahoe made the remarks during a discussion of Nike’s fourth quarter earnings, which revealed that sales had doubled, better than expected, to $ 12.3 billion (£ 8.8 billion) in the three months to the end of March .
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What is Xinjiang and who are the Uighurs?
Xinjiang, China’s largest region, produces around a fifth of the world’s cotton. In theory an autonomous community, but in reality they are faced with limitations that have only increased in recent years
Millions of Chinese Uyghurs live in Xinjiang, a Muslim minority that is culturally and ethnically close to the Central Asian nations.
In recent decades, the mass migration of Han Chinese (the ethnic majority of China) to Xinjiang has fueled tensions with the Uyghurs, which at times escalated to deadly violence.
This has led to massive security measures and an extensive government surveillance program, which critics say violates Uighur human rights. China says such measures are necessary to fight separatism and terrorism
Uyghurs have been detained in camps where there have been reports of torture, forced labor and sexual abuse. China has denied these claims, stating that the camps are “re-education institutions” aimed at lifting Uyghurs out of poverty.
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In March, a group of Western countries imposed sanctions on officials in China for violating human rights against Uyghurs.
The sanctions were introduced as a coordinated effort by the European Union, the United Kingdom, the United States and Canada.