H&M in China recorded a major loss following a bad event; let’s find out what has happened and how H&M is perceived in China.
The event that occurred a few years ago at Dolce & Gabbana in China is repeating itself to the clothing multinational H&M, creating a disastrous loss for the Swedish brand.
What happened to H&M in China?
H&M is a true clothing giant with 5076 stores in 2019 and 126376 employees in 2019 (source statista.com).
For H&M due to the pandemic, an inevitable decline in physical sales took place in 2020. However, offset by a strong presence on e-commerce platforms, with the result that, even though the turnover fell by 18% worldwide, the turnover remained at 18.5 billion euros.
H&M positioning in the Chinese market
The Swedish company in China has 520 stores and a turnover of almost one billion euros between November 2019 and November 2020, China represents the fourth market in the world for H&M.
A few weeks ago, the top management of the company issued a statement, later withdrawn, in which they expressed “strong doubts” about the working conditions of cotton harvesters in the Xinjiang region and expressed their intention not to buy the cotton produced in that region.
This region produces 87% of Chinese cotton and 7% of world production. Workers mainly belong to the Uyghurs ethnic group, an ethnic minority of Muslim religion.
Accusations that is leveled against the Chinese apparatus is that of forcing this population to work in these fields in a forced manner, in conditions of almost slavery. The communiqué was withdrawn and it seemed to end there but, very recently, sanctions were triggered by the United States and the European Union for the same reason.
The consequences of H&M in the Chinese market
With an impressive operation in terms of speed, size and coordination, all the mass media have lined up in defense of national pride, many stores have closed in protest, and virtually all influencers have suggested a boycott of purchases of H&M products.
What happened on social media was also impressive: with disarming timing, the Weibo network successfully launched the campaign: “I SUPPORT THE COTTON OF XINJIANG”.
At the same time H&M has completely disappeared from social networks and from the web in general, to the point that it is no longer even possible to locate the stores.
The clothing company has also completely disappeared from e-commerce platforms including billionaire Jack Ma’s multinational Alibaba.
Xinjiang problem in China
Despite the timid attempts to justify the sales of H&M in China they have in fact CERTIFIED and, even if the Chinese establishment “forgives” H&M, the damage to image is so great that it is really difficult to imagine what the future of this company in the “middle country”.
Through this article we emphasize the extremely important role of social media in world society and especially in China.
Taking part in political views in China can be very risky, so we suggest you carefully consider what to say and not to say in the next largest market in the world.
Long Advisory digital marketing agency in China
Long Advisory supports American and European companies in China through digital marketing. In fact, our experience has led us to believe that today, the best and most convenient approach to make your brand well-known in China is through a digital approach. Furthermore, thanks to our know-how we know how to make your brand known to potential Chinese consumers. With the effective coordination of Long Advisory, your company will see a new rise in the largest market in the world: China.
Interested in expanding your brand in China? Contact us for more info and details at firstname.lastname@example.org
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