From the blog I posted last Sunday, readers are fairly likely to notice that clothing enterprises，like H&M and Nike, shot themselves in their feet — their daydream of “breaking the ‘bowl’ of China while intending to earn lots of money from Chinese people” proves to be in vain.
In this blog, I am going to keep a lookout for what shock waves the breeze from those retail giants’ ‘butterfly wings’ will make to the other end — that is, Chinese markets. Instead of signing for the gloom and doom engendered by the boycott campaign, I am more willing to look on the bright sides on the ground of three aspects: (1) the renovation of internal economic circulation; (2) the revitalisation of domestic clothing brands; (3) the solidarity of Chinese people.
First of all, such a boycott unexpectedly will precipitate the internal economy into a virtuous circle. This is not a sentimental bosh considering the fact that China confronts a shortage in cotton supply regardless of its position as the world’s second-largest cotton producer. According to the China Grain Reserves Group, the country had produced 5.95 million tons of cotton during the 2020–21 season (which ended in January, 2021), but the total domestic demand stood at about 7.80 million tons in 2020, so in order to resolve the shortage, China must import about 2.00 million tons every year from countries including Brazil and India. However, the long-fibre cotton with premium quality, which is rebuffed by unintelligent retailers, can leverage the domestic supply-demand chain, compensate the shortfall in cotton for domestic market, and ensure a trade-off between cotton export and import, thus renovating the internal economic circulation.
Besides, the rejection to Xinjiang cotton will indirectly propel domestic enterprises to gear up to expand. Hong Kong Exchanges and Clearing Ltd. (HKEx) has given official testimony to the wax of domestic brands by virtue of the boycott event recently. In light of HKEx’s statistics collected on 25th March, the share of a Chinese sports brand, Li Ning Co. Ltd. soared by 10.74% (from $45.15m to $50.00m) in HKEx, which was followed by another domestic brand named Anta Sports with an astounding surge from $111.9m to $121.3m (an 8.4% growth) during the same day. These household brands rose instantly from ordinary to fame in the mind’s eye of Chinese consumers primarily thanks to the brands’ unwavering allegiance to Xinjiang cotton.
Most importantly, their campaigns will concersely put a premium on an indomitable unity of Chinese people. As what have been referred to in the blog last week, a slew of social elites had terminated their contracts with those firms who turn into a green-eyed monster in face of the flourishing and prospering Chinese market. Meanwhile, H&M Group faces a backlash by e-commerce and social media platforms such as Taobao, Pinduoduo, JD.com and Tmall while triggering growing calls for a boycott by Chinese clienteles, leaving its flagship stores almost in the middle of nowhere nationwide.
Therefore, based on three facets above, we should look on the bright side rather than complain about the aftermath we are encountering — everything’s coming up roses for the Chinese market after the shock wave arising from the ‘butterfly wings’.