H&M Faces Removal from Chinese Platforms Amidst Xinjiang Cotton Concerns

H&M has been taken down from prominent e-commerce and service applications within China. This action follows a strong rebuke from a Communist Party organization regarding a statement expressing “deep concern” over reported instances of forced labor within the cotton industry of Xinjiang.

Impact on H&M's Business

Given the increasing prevalence of online shopping among Chinese consumers, this coordinated online response has the potential to significantly affect H&M’s financial performance.

Widespread Delisting

As of Thursday morning, searches for “H&M” on major e-commerce platforms like Alibaba’s Taobao, JD.com, and Pinduoduo yielded no results.

The removal extends to other key online services, including Meituan’s Dianping and map applications provided by Tencent and Baidu.

Reliance on Third-Party Platforms

Unlike its sales strategy in many Western markets, where H&M primarily utilizes its own app or website, the company depends on a network of third-party e-commerce platforms for distribution within China.

This is due to the dominance of “super apps” which have largely superseded individual applications and websites.

Many international brands, including H&M, maintain official stores on platforms like Taobao and operate streamlined applications within WeChat.

China as a Key Market

Mainland China represented one of H&M’s four largest markets in 2020.

During that year, the fashion retailer operated 445 physical stores across 146 cities throughout the country.

Communist Youth League Criticism

On Wednesday, the Communist Youth League, a division of the ruling party known for its effective online campaigns, utilized the microblogging platform Weibo to accuse H&M of disseminating false information concerning the Xinjiang cotton industry.

This social media post ignited considerable public outrage and garnered 383,000 likes within a single day, accompanied by tens of thousands of user comments advocating for a boycott of H&M.

Unclear Origins and Potential Government Involvement

The reasons for the resurfacing of H&M’s statement from the previous year remain unclear.

It is also uncertain whether Chinese internet companies received directives from the government to delist H&M’s online stores and remove associated information.

China's Stance on Xinjiang

The Chinese government consistently refutes allegations of human rights violations in Xinjiang.

It maintains that the “vocational educational training centers” established in the far-west province, home to the predominantly Muslim Uyghur ethnic minority, are integral to its counter-terrorism initiatives.

Escalating Diplomatic Tensions

Diplomatic friction between China and Western nations has been intensifying this week.

Xinjiang, alongside other contentious issues, lies at the core of the ongoing political dynamic between China and the United States.

Several Chinese state-affiliated news sources have called for a nationwide boycott of H&M, referencing the removal of the retailer’s products by Chinese internet platforms.

Company Responses

JD.com, Pinduoduo, Tencent, Alibaba, and Baidu all declined to provide comment regarding this situation.

Meituan was not immediately available for comment.

Tug of War: International Reactions and Brand Responses

Recent statements from the Youth League followed swiftly after coordinated sanctions were levied by Britain, Canada, the European Union, and the United States against Chinese officials.

These sanctions represent an intensification of disputes concerning human rights within the Xinjiang region.

China responded with reciprocal sanctions, imposing restrictions on EU entities and individuals, effectively barring them from entry and commerce within the country.

H&M's Response to Public Outcry

H&M seemingly removed a previously published statement that sparked controversy.

Addressing the significant online backlash, the Swedish apparel company released a statement on Weibo.

This statement affirmed their commitment to ensuring their global supply chain adheres to sustainable development objectives.

Furthermore, H&M clarified that their position does not signify any endorsement of a particular political ideology.

The company emphasized its ongoing respect for Chinese consumers and its dedication to sustained investment and growth within the Chinese market.

Broader Impact on Foreign Brands

Several other international brands are now facing scrutiny as online users focus their attention on the Better Cotton Initiative.

This organization champions sustainable cotton production and includes prominent members such as Nike, Adidas, and IKEA.

In October, the BCI announced the suspension of its certification for cotton originating from Xinjiang, citing concerns related to human rights.

The United States government initiated sanctions on Xinjiang cotton imports beginning last year.