Sales of internationally renowned sporting goods companies Nike and Adidas plummeted in April on Chinese online shopping platforms. Earlier, the two companies were boycotted by Chinese consumers for publicly stating that they would no longer use Xinjiang cotton.
According to an analysis by Morningstar, a leading U.S. investment research and fund ratings firm, Adidas’ brand plunged 78 percent year-over-year in April on Tmall, China’s largest online shopping platform, Nike plunged 59 percent and apparel brand Uniqlo fell more than 20 percent.
The Tmall site is considered the largest channel for many brands to sell their goods in China and is a major barometer of how well they are selling. The site alone accounts for more than 10 percent of the sporting goods brand’s China-wide revenue in terms of sales.
The boycott by Chinese consumers underscores the awkward situation foreign branded goods face in the important market of China. Foreign brand companies such as Nike and Adidas have joined the call to not use Xinjiang cotton because of the Chinese authorities’ widespread crackdown on the Uighur minority in Xinjiang.
China is a huge and important market for sales of internationally recognized brands. U.S.-based Nike generated nearly one-fifth of its revenue from the Greater China region in its fiscal year ending May 31, 2020.
While boycotting foreign brands, Chinese consumers have turned to buying goods from well-known domestic Chinese brands Li Ning and Anta, which strongly support the use of cotton from Xinjiang. Sales of Li Ning branded merchandise on Tmall jumped 800 percent in April amid a wave of nationalism that boycotted foreign goods in favor of domestic ones.
Although the boycott by Chinese consumers has hit international brands such as Nike and Adidas hard, some analysts believe that the boycott will not last long as the issue of “Xinjiang cotton” fades and may disappear in the coming months if the official media does not launch a new wave of attacks on foreign brand companies.
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