Boycott and all, Adidas sells 150% more in China

Adidas is celebrating. It is not for less, it seems that the problem (not minor) of the coronavirus pandemic has definitely stopped, at least in Asia, where it has one of its largest markets by sales volume: China.

The celebration is double for Adidas, because the increase occurred in the middle of a boycott of the products of that brand (and other international ones) because they openly demonstrated in favor of the Muslim minorities of the Uyghurs, who live in the Xinjiang region , west of China.

In this context, the statements of Adidas CEO Kasper Rorsted, who said that the company is doing “everything possible” to support the fulfillment of human rights throughout the planet are not strange.

On the other hand, the German brand expects to have an excellent 2021 in sales thanks to an unprecedented demand for its products.

In this sense, there is already talk of a second quarter with a “significant acceleration” due to the launch of innovative products and the sponsorship of major sporting events, such as the UEFA Euro in Europe and the Copa América in South America.

Adidas big numbers

Adidas reported net income of 502.8 million euros (about 604 million dollars) in the first quarter of 2021, a stellar increase compared to the same period of 2020, when the pandemic hit around the world, especially in Asia.

In China alone, the sports apparel and shoe company’s sales rose 155 percent in the first three months of this year.

The increase in the country that governs Xi Jinping came amid a boycott by some consumers in mainland China of a wide group of international brands, including Adidas, for having spoken out in favor of the ethnic minorities that inhabit the Xinjiang region, place where numerous cotton plantations are established.

The demonstrations had started at the United Nations, followed by the United States, the United Kingdom and other European countries, followed by private labels such as Adidas.

Two months ago, Canada, the UK and the US issued a joint statement expressing “great concern” about forced labor, detentions and other abuses committed by the Chinese authorities against Uyghurs in that eastern region of the United States. Asian giant.

The European Union has also pushed for sanctions on Chinese representatives who, they said, are being responsible for abuses against these minorities.

In response, the Chinese Foreign Ministry responded by saying that the Western governments’ claims were “a big malicious lie” designed to “defame China” and “prevent the development of the nation.”

How did Adidas get into this problem?

In line with the statements of the different countries, Adidas spoke out in favor of minorities in China and said that it has “zero tolerance for slavery and human trafficking.”

On the other hand, upon learning that several companies from which Adidas sources buy the cotton in Xinjiang, where ethnic minorities are allegedly subjected to forced labor, he demanded changes in the purchasing lines.

In addition to Adidas, other international brands have struggled, such as rival Nike and Swedish store H&M.

Both brands also suffered from boycott attempts driven especially by Chinese social media after comments regarding the situation in Xinjiang.

Although Adidas did not explicitly refer to the issue in the accounting report for the first quarter, it expressly spoke about “adverse impacts” including “the geopolitical situation.”

Strong growth for Adidas in 2021

For the remainder of the year, Rorsted said “very strong growth” in China sales is expected throughout 2021, which will boost all of the brand’s numbers overall.

Regarding the problem of human rights, the CEO of Adidas said he was “concerned” because it is “a sensitive issue.” He also expressed that the brand is “doing everything possible” to ensure that human rights are protected.

Beyond this, Rorsted clarified that they do not expect to have problems sourcing cotton from their suppliers in China.

What happens in china

China is accused of committing numerous human rights violations against the Uighur minority.

Nations that have spoken out in this regard have called for sanctions of all kinds, including banning travel and freezing assets for Chinese officials in charge of eastern regions.

Although the complaints take time, in October 2020 a journalistic investigation showed that in the Asian giant, thousands of citizens were being forced to do work without payment, only in exchange for food in cotton plantations.

Nike and H&M, for example, were some of the brands that made a public statement related to these complaints and, in response, consumers called not to buy.

Boycott

The issue returned to the media arena because a series of threats were made public in publications on the most widely used social networks in China. In general, they were driven by the Communist Youth League, a subset that is part of the Communist Party.

In the shared texts, these companies were referred to as promoters of boycotting the cotton harvest in that region of China and, in addition, of seeking profits from the sale of their items in that same country. “Do not get your hopes up,” they said on the networks.

At the same time, companies focused on e-commerce in China, such as Pinduoduo, JD.com and Tmall, also joined the boycott of brands such as Adidas, Nike and H&M.

In addition, great celebrities well known in that country, such as Wang Yibo, Huang Xuan and Victoria-Song, made public statements in each of their networks saying that they were going to renounce their respective contracts with those brands.

They hinted that China’s interests were above all else.

–