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E-commerce sites pull H&M products after company's Xinjiang statement

Date: 2021-03-29

Major e-commerce sites such as Alibaba Group's Taobao and have pulled products related to retailer H&M after the company sparked widespread fury a few days ago for its previous statement that it is "deeply concerned" about reports of "forced labor" in Northwest China's Xinjiang Uygur autonomous region.

In an earlier statement published on its official website, H&M said that due to "reports from civil society organizations and media that include accusations of forced labor and discrimination of ethno-religious minorities in Xinjiang," the company does not work with any garment manufacturing factories from Xinjiang and does not source products from there.

Chinese netizens have voiced their outrage at the company's stance.

In September 2020, H&M announced it has ended its relationship with Chinese yarn producer Huafu Fashion over accusations of “forced labor” involving ethnic and religious minorities from Xinjiang.

International companies including Uniqlo, Nike, and Adidas had all issued similar statements about Xinjiang.

Uniqlo’s parent company, Fast Retailing Group, said in a statement on its website in August, 2020 that its brand Uniqlo did not produce any products in Xinjiang, nor did it subcontract the products to local fabric factories or textile factories. The Japanese company added, “We are aware of reports raising serious concerns about the situation for Uighurs in Xinjiang, China.”

Kyodo News reported in February that 12 major Japanese companies have established a policy of ending business deals with Chinese companies found to benefit from forced labor in China's Xinjiang region. The 12 companies include MUJI and Fast Retailing Co.

US brand Nike issued an English statement in March, 2020 that it is “concerned about reports of forced labor in, and connected to, the Xinjiang Uygur autonomous region.” It said the company does not source products from the region and ensures that its supplies are not using materials from Xinjiang.

The company also added that its factory in Qingdao stopped hiring workers from Xinjiang in 2019 and conducted an audit to determine whether there were any employees from the region at the facility.

Also in 2020, German brand Adidas addressed a number of points in relation to the inquiry that the company “has never sourced goods from Xinjiang”, adding that it has instructed its “suppliers not to source any yarn from the Xinjiang region after the allegations were made in spring 2019.”

Chinese social media users also found that UK brand Burberry said it did not have any operations in Xinjiang or work with any suppliers based there.

US brand New Balance said that it did not have any manufacturers of finished products or key material suppliers in Xinjiang.

Puma noted that it has taken significant measures to ensure that there is no indirect involvement of Xinjiang labor in the manufacturing of its products.

The companies that issued the statements about a halt to sourcing cotton from Xinjiang are all members of the Better Cotton Initiative, a Switzerland-based organization.

Founded in 2009, the BCI is a non-profit international membership organization, which is intended to monitor the impact of cotton production on the environment and labor. Its members mainly include cotton growers, cotton textile companies, and retail brands. As of the beginning of May 2020, the number of BCI members had reached 1,953, and it is still increasing.

Last October, the BCI said on its website that it had suspended activities in Xinjiang as well as licensing of the region's cotton, citing allegations and "increasing risks" of forced labor. On March 30 last year, the BCI announced that it would suspend cooperation with licensed farmers in Xinjiang during the 2020-21 cotton season over allegations of forced labor in the region.

Incidents of foreign brands boycotting Xinjiang products continue. Some analysts said that if relevant international brands refuse to repent, it will have a negative impact on their sales in the Chinese market and on the whole industrial structure.

In addition, domestic clothing brands may benefit from the issue. Casual wear brands such as Heilan Home, Semir, and Urban Revivo will speed up development in domestic market. Chinese brands such as SHEIN will continue to open overseas markets. Leading domestic sportswear brands such as Anta, Li Ning, and Xtep will continue to increase their share in the domestic market.

Recently, several screenshots showing Amazon's product delisting notices sent to sellers have raised attention from cross-border e-commerce sellers of cotton-containing products such as clothing and household goods.

One of the emails said that according to US laws on products containing cotton or tomatoes produced in Xinjiang, the platform does not allow the sale of such products, so the related bath towel products have been removed.

However, many sellers said they haven’t received such notices. Products using Xinjiang cotton can still be seen in the search results of Amazon.

It is worth noting that, as of now, Amazon has not stated its position on the above-mentioned issue.

Wayfair, a US home furnishing e-commerce platform also sent a warning letter to merchants recently, asking sellers to disclose supply chain information as they boycott products in Xinjiang and other parts of China due to forced labor. It also added that merchants who do not obey these instructions may be subject to civil penalties.

On Jan 14, the US banned the entry of all cotton products and tomatoes produced in Xinjiang, as well as all products made with those materials, citing alleged use of forced labor.

The ban allows customs officials to stop imports that they suspect are made with raw materials from Xinjiang, regardless of whether they travel into the United States directly from China or through another country.

Since about 85 percent of Chinese cotton is grown in Xinjiang, any finished product containing cotton imported from China may be detained. The release of the detained goods requires proof that the goods do not contain cotton from the region.

However, some analysts believe that the above-mentioned ban in the US will be difficult to implement, as it is difficult to determine the source of fibers in cotton textile products.