Nike and Adidas have seen sales in China plummet as a state-media driven boycott continues to hammer western brands.
According to a new report from financial services giant Morningstar sales of both retailers dropped significantly on China’s largest online shopping platform, Alibaba’s Tmall.
Adidas saw sales dive 78 per cent year-on-year, while Nike saw a drop of 59 per cent over the same period, with Chinese consumers instead favouring local alternatives like Anta Sports and Li Ning.
It is understood that nearly a fifth of Nike’s overall sales came from China last year, alongside nearly a quarter for Adidas.
This highlights the growing issue for western brands who were added to the Chinese “blacklist” in March over commitments they made to boycott cotton produced in the Xinjiang region.
Brands must choose between denouncing Xinjiang cotton, which is widely reported to be produced under forced labour by Uighur Muslims, and losing a huge chunk of their global revenue from the Chinese market.
According to Morningstar’s equity analyst Ivan Su the boycotts could be temporary, pointing to the fact that there have been no renewed attacks from state media, adding that they “should most likely fade away over the next months”.
Nike, Adidas, H&M, Gap, Fila, New Balance, Zara, Under Armour and numerous others were all added to a Chinese “blacklist” of brands after government affiliated groups alleged they were “spreading rumours to boycott Xinjiang cotton”.
While some brands like H&M have been all but wiped from China’s ecommerce landscape, Nike and Adidas products were still available to buy on Tmall, with some analysts predicting the boycott could actually boost sales by driving up demand.
The boycott started after the UK, EU, US and Canada voted to impose sanctions on China amid ongoing reports of forced labour, mass sterilisation of women and a raft of other human rights abuses against Uighur Muslims in the Xinjiang region.
In response to the sanctions, any brands who have stopped using cotton from the region or spoken out against alleged forced labour have been accused of spreading “lies and disinformation” about China.
The US has accused China of running a state-sponsored “corporate and consumer boycott” against all Western brands that have refused to use cotton from the Xinjiang region.