Catch 22

    “April is the cruellest month,” a poetic sentiment that H&M’s CEO, Helena Helmersson, will surely agree with these days, faced with the real possibility of alienating either the brand’s Chinese customers or its Western fans or both. Although to be fair to April, her troubles started much earlier.

    When the Swedish brand last September announced it would no longer source cotton from Xinjiang because of concerns over forced labour among the Uyghurs, the statement on their website went largely unnoticed by Chinese media. Nothing much happened until March 22, when the EU, US, UK, and Canada decided to unanimously impose sanctions on China over the Uyghur repression issue, thereby unleashing the mighty Chinese Communist Party’s fury.

    At that point, some overzealous members of the Communist Youth League of China managed to dig out the months-old statement on H&M’s website and their outspoken righteous indignation over the unfair accusations culminated in a boycott of the brand in China. The rest is (recent) history: within 24 hours, Chinese consumers couldn’t buy H&M clothes online anymore, the locations of the brand’s stores were removed from digital maps, and it even became impossible to order a DiDi[1] to any of those palaces of retail fashion.

    The Xinjiang announcement is nowhere to be found on H&M’s website anymore, replaced by a new statement issued last week: “China is a very important market to us and our long-term commitment to the country remains strong.” The Chinese consumers couldn’t be less impressed, though. “For you, China is still an important market, but for China, you are just an unnecessary brand,” according to one netizen.

    Meanwhile, back at home, H&M is fighting a different kind of battle. Their engagement on the Xinjiang cotton issue is perceived as rather half-hearted and ridiculed by the press. The fact that the Swedish Prime Minister is saluting them for taking “responsibility for the working conditions of employees all over the world” might be a poor consolation. Instead, it even serves as another reminder of all those poor underpaid employees labouring all along fast fashion’s intricate supply chain. So far, no one is boycotting H&M in the west, but the company is hardly gaining any new fans over the current debacle either.

    “Oh, East is East, and West is West, and never the twain shall meet,” as another poet will have it, then? Or is there a middle way, a narrow path that a global retailer can thread upon carefully, hoping to keep all their customers happy and eager to buy yet another new garment? If there is, H&M for one must be spending this Easter break frantically trying to find it, I am sure.

    Advice is pouring in from all directions. Tough it out and call China’s bluff, suggests Bloomberg, Beijing’s commercially-minded government will have to let it go, just as they have done before with Korean cars and American basketball, for instance. Alternatively, eat that humble pie, preferably with a side order of grovelling sauce or whatever the Chinese equivalent might be. After all, the future mass consumer is over there, Western teenage trendsetters already turning their backs to fast fashion.

    Management by hiding, or Swedish-style conflict avoidance, is another option, of course. You can always hope that the storm will eventually blow over of its own…

    [1] For those of you not familiar with it, DiDi is China’s answer to Uber, an immensely popular app for sharing car rides


    Picture © ARG – NordSIP

    Julia Axelsson
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.

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