H&M Faces Boycott in China Over Stance on Treatment of Uyghurs

Swedish group H&M, which owns the second-largest clothing chain in the world, has released an official statement on the situation in China. In it, the company announced that it is working with Chinese colleagues and is doing everything possible to cope with current problems but does not provide any specifics.

Recall that recently, H&M was at the center of a scandal over its decision to abandon cotton purchases in Xinjiang Uygur Autonomous Region due to allegations of massive, forced labor camps in the region. A report by the Australian Strategic Policy Institute (ASPI) thinks tank, delivered in March, distinguished H&M as one of the recipients of a constrained work program through colored yarn maker Huafu, which possesses an industrial facility in eastern China’s Anhui territory.

Who are the Uyghurs?

The Uyghur minority lives in the Xinjiang Uyghur Autonomous Region of China. They make up 45% of the area’s population and 40% are ethnic Han people. In total, about 10 million Uyghurs live in China.

Since China regained control of the region in 1949, many ethnic Han Chinese have migrated to Xinjiang, which is why the Uyghurs are now worried about the possible crowding out of their own culture.

What is known about the situation of the Uyghurs in China?

Activists who fight for the rights of the Uyghurs say Beijing discriminates against them. One example is their so-called re-education. According to the testimony of journalists and human rights activists, the Uyghurs are being isolated in “educational camps.” Some are sent to their hometowns “under arrest.”

According to Reuters, citing UN activists and experts, 1 million Muslim Uighurs are being held in Chinese camps. China denies this and claims that these camps are merely providing vocational training for people.

The researchers say that activists are in constant fear of possible harassment. In addition to such violations of rights, everyday discrimination is also used against Uighurs, making the minority feel like second-class people. For example, Uighurs may be refused a hotel room.

H&M is determined to overcome the crisis

The company said it does not work with any garment manufacturer in the region and will no longer buy cotton from Xinjiang, which is China’s largest manufacturing region. However, the Swedish group admitted that it had “indirect commercial relations with a factory” located in Shangyu, Zhejiang Province (southern China) and owned by Huafu Fashion.

Recently, against the backdrop of growing tensions between China and the West, angry calls to boycott H&M began to appear on Chinese social media. A few Chinese influencers and celebrities quickly quit teaming up with the organization, while the brand’s items vanished from major online stores in China.

As a result, a boycott of the retailer was declared in China – it was blocked access to all major Chinese platforms, including Tmall, Taobao, JD, and Pinduoduo, and some landlords forced the company to close physical stores as well – according to H&M, about 20 outlets are now closed in the country.

The wave of consumer boycotts in China coincided with an agreed set of sanctions imposed by the UK, Canada, the European Union, and the United States last week for what they say is a violation of human rights in Xinjiang Uygur Autonomous Region. The U.S. government has publicly accused Beijing of the genocide of Uyghur Muslim ethnic minorities in the region, and in an attempt to mitigate the conflict, the company issued a statement that China is a very important market for it. The brand also said that its commitment to the country remains high.

The H&M Group added that it has been present in the Chinese market for over 30 years. During this time, the company has witnessed significant progress within the Chinese textile industry.

“At the forefront of innovation and technology, China will undoubtedly continue to play an important role in the development of the entire industry,” said the H&M Group. Other retailers and brands such as Nike, Adidas, Gap, and Converse have made similar claims.

H&M suffers losses and cuts retail

Meanwhile, the H&M Group reported a first-quarter loss after tax of SEK 1.07 billion, compared with a profit of SEK 1.93 billion in the previous year. Net sales during the reporting period decreased to SEK 40.06 billion from SEK 54.95 billion a year ago. In local currencies, net sales were down 21%. At the same time, sales in local currency in the period from 1 to 28 March 2021 increased by 55% compared to the same period in 2020.

The issue of combating discrimination is a complex topic. In turn, businesses are now trying to balance: to show that they are concerned about the state of human rights in China, but at the same time to avoid expulsion from the large Chinese market.

China is an important supplier and market for H&M. The company wants to meet the expectations of its customers, employees, suppliers, and the state. But at the same time, it is important for the company to protect the global image as a supplier of safe and environmentally sustainable products manufactured in accordance with social responsibility. H&M should be able to handle this, but other companies may be more vulnerable, especially when China’s relations with the United States, Europe, and others become more contradictory.

And what is your opinion on this story? Do you agree with the H&M vision on social sustainability, or you see it as a marketing campaign for the brand’s reputation?

Should brands be looking into social sustainability even at the price of their own expulsion from the country and sacrificing their activity on major markets? Will more companies be ready to pay such a price?