Nike CEO: 'China is a very important market for us'

You may recall that Nike faced a backlash in China earlier this year after a new round of sanctions created tension with several western brands. In Nike’s case, they were caught up in an online campaign started by the Communist Youth League aimed at both Nike and the Swedish clothing brand H&M.

Both companies had said in separate statements that they were “concerned” about reports that Uighurs were being forced to pick cotton in Xinjiang, and that they did not source products from the region.

But the latest furore appears to have been sparked by a recent social media post by the Communist Youth League, a Chinese Communist Party group.

“Spreading rumours to boycott Xinjiang cotton, while also wanting to make money in China? Wishful thinking!” it said on microblogging platform Weibo on Wednesday morning, as it shared screenshots of H&M’s statement.

The backlash had a clear impact on Nike’s sales in China. Bloomberg reported last month that sales were up significantly for Nike’s Chinese rivals:

Chinese consumer support in response to the alleged human-rights issues in Xinjiang region has boosted at least one local sneaker maker by some 250% since the controversy escalated in late March. A Bloomberg gauge of Hong Kong-listed apparel and retail stocks touched the highest level since 2015. And while Nike shares popped after earnings last month, they are only up 20% since end-March…

“There is definitely some bitter aftertaste among Chinese consumers since the Xinjiang cotton boycott,” said Catherine Lim, a senior analyst with Bloomberg Intelligence. The issue has helped raise the profile of homegrown brands like Anta and Li Ning, she added.

With all that in mind, it’s not surprising that Nike is doing their best to be as non-confrontational as possible with China at this moment. Here’s CEO John Donahoe on CNBC doing his best to say absolutely nothing when asked about China’s human rights record in Xinjiang and crackdown on Hong Kong.

Look, I get that Nike is one declarative statement away from financial disaster so the CEO is tip-toeing through this the best he can. But of course Nike isn’t just any company. They are the company whose brand is heavily involved in social justice campaigns here in the US. Here’s their Twitter bio as it looks today:

Social justice issues are really front and center at Nike. Here was their response to the shooting of Jacob Blake:

No doubt if CEO Donahoe had been asked about BLM or attacks on Asian people or any number of other hot button issues here in the US, he would have had a lot to say about corporate responsibility and leading by example. But when he’s asked about human rights in China all we get is a mish-mash of anodyne statements about their long history and continued investment. You definitely don’t see any messages like the one above about freedom in Hong Kong or reeducatin camps in Xinjiang.

Maybe Nike could take some inspiration from one of their own promo spots. “You don’t need to be a star to have a voice” the clip below says. The point this was making last October is that you just need to get out and vote to have a voice. Of course that’s something that no one in China can do. It’s odd that Nike hasn’t used its voice to say something about that. The hashtag on this clip was #YouCantStopOurVoice but the truth is, you can stop Nike’s voice. All it took was a little push from the Communist Youth League.