What: Fashion brands are caught in international politics games

Why it is important:  The Xinjiang incident is not affecting only brands: worldwide retailers should also watch the developments of this affair.

Following sanctions imposed by western countries on Chinese officials as a response to the alleged use of forced labour in Xinjiang, Chinese customers inflicted a retaliatory response to western brands, among which the most affected was H&M. The response was swift and damaging: the brand was removed from social media including the geo-localisation of its stores, some of which were closed by force. Other brands were engulfed in the backslash, and therefore, most of them toned down on the topics of forced labour and Xinjiang.

The only brands that remained out of this movement were the ones who had not communicated on this topic previously, or which were not particularly transparent on the issue. As a consequence, observers fear that it might encourage brands to lower the voice on forced labour and more generally on sustainability, as soon as it can strike potentially damaging political nerves. It is also feared that, on the mid-range, brands find themselves in an impossible situation, with Western customers asking for transparency that can not be provided without potentially affecting sales on their most lucrative market for the time being, China.

Is that a brands-only problem? Western retailers should watch out the development of this topic with great care:

• Their private labels are subject to the same expectations of transparency from their local, Western, customers, and any move might jeopardize their supply chain badly,
• China has demonstrated with this move that they were ready to hit hard on the economic aspect as soon as politics needed it. It raises questions on the behaviour of Chinese customers once borders open up again, in case a retailer displeases them by its own declarations or commitment to local customers, now that any message on social media or Internet has a worldwide resonance.

Fashion, Xinjiang and the perils of supply chain transparency