Cotton, the raw material integral in the production of many of the world’s garments, is in the spotlight for the past week. In particular, cotton sourced from the Xinjiang region takes the centre stage and is the source of contention that has resulted in H&M and other Western brands such as Adidas, Burberry and Nike being boycotted by its Chinese customers.

Now, why is this a big issue and shouldn’t these Western brands be given the freedom to choose where they obtain their raw materials? The short answer is, yes, these Western brands have the liberty but most of the time when profits are at play, each decision can have far-reaching consequences.  

This is not the first time fashion brands have incurred the ire of the Chinese people, but the current issue related to Xinjiang is highly sensitive, unlike the previous cultural faux pas that has happened. This is because the region is home to many ethnic minorities including the Uyghurs, a Muslim minority, which has been in the spotlight since 2016. In 2020, foreign brands such as H&M and Nike have issued a statement saying that they will be cutting out cotton sourced from Xinjiang due to the alleged use of “forced labour”—the Chinese government has vehemently denied these claims. 

The ripples effect from this is observed most prominently online where netizens have voiced their discontent on microblogging sites and major e-commerce platform have removed these brands. Following this, many Chinese brand ambassadors have either distanced themselves or completely cut ties with their Western employers.

One thing to note is that in China, brand ambassadors play a pivotal role in influencing sales for many brands. Celebrities have the ability to legitimise brands and drive sales, unlike the West where it is predominantly through the brand’s storytelling and heritage. In an article by the Business of Fashion, Chinese fashion blogger, Mr. Bags sold 3.24 million RMB worth of handbags for Tod’s in just under six minutes. His previous record saw him sold 1.2 million RMB worth of Givenchy handbags in twelve minutes. This new marketing strategy has proven to be a new favourite amongst Western brands which saw the appointment of many Chinese stars as their brand ambassadors. For H&M it was Victoria Song, Nike with Wang Yibo and Burberry with Zhou Dongyu.

This issue serves as a two-pronged assault on the Western brands and navigating through this quagmire can be tough because it involves two distinct groups of customers that hail from both the West and China. On the one hand, customers from the West still make up a significant portion of the income stream and increasingly, these customers are placing more importance on how their clothes are made such as the conditions of the workers and if the environment is protected. On the other hand, China is an important market for these international fashion brands. The Chinese economy was not as affected as the West when the pandemic hit and it is now registering growth faster than its Western counterparts. Given the burgeoning middle class in China, fashion labels do not want to miss a slice of that pie where its home market is still reeling in from the effects of the pandemic. For these Western brands, this is a Sisyphean task to choose between morality and profits.

In conclusion, the fashion industry is one of the most convoluted sectors in the world economy. Each component of the supply chain involves a multitude of key players that can span across political and cultural divides, thus, further altering the already muddy industry. For the Western brands, it will prove to be a herculean task to balance the demands from its domestic market against that of the growing Chinese market.