What Happened: Uniqlo, Zara and Skechers are facing claims of human rights violations in China, according to a Europe-based Uyghur organization.
The European Uyghur Institute in Paris has launched a lawsuit against Inditex Group and Fast Retailing — the parent companies of Zara and Uniqlo, respectively — along with American footwear brands Skechers over allegations of forced labor by Uyghur workers in China.
The brands are accused of being “involved in the surveillance, the management and the construction of camps, as well as the overall monitoring of the Uyghur region.”
Evidence submitted included a video that depicts Uyghur workers manufacturing a Skechers shoe inside of a factory. However, its veracity has yet to be confirmed, according to Nikkei Asia.
The Jing Take: Whether overseas or in China, global brands have had a notably difficult time navigating the Xinjiang cotton controversy which began in 2021.
As geopolitical tensions between the US and China continue to escalate, the row over the use of Xinjiang-produced cotton has left designer labels and fast fashion brands in a major dilemma. Either use cotton allegedly produced by forced Uyghur labor, or face potential backlash and boycotts by Chinese consumers.
The controversy has been a thorny dilemma for many brands given that Xinjiang is a major cotton producer — producing over 20% of the world’s cotton — and accounts for 80% of China’s domestic cotton production.
Activists and human rights groups like the European Uyghur Institute accuse China of detaining up to 1 million Uyghurs in internment camps, where more than half a million people are forced to to pick cotton, according to claims in 2020.
In the US, the implementation of the Uyghur Forced Labor Prevention Act has had a major impact on apparel, footwear and textiles imports from China, with almost 49% of imports denied entry into the US in Q3 of 2022, according to Nikkei Asia.
Meanwhile in China, brands have faced backlash and boycotts from local consumers for taking stances on the alleged human rights abuses. In 2021, Adidas, H&M and Nike were among the brands facing boycotts in China, after they spoke out about the use of Xinjiang-produced cotton.
And it seems Chinese consumers weren’t quick to forget this. In a report by global intelligence firm Morning Consult, 33% of Chinese consumers surveyed stated they had boycotted a global brand for generalized unethical behavior which included “perceived prejudice against Chinese consumers.”
Nike’s sales have continued to be impacted by fallout from the controversy. As such, the sports giant is seeking a new way forward through the launch of hyperlocal products.
Despite warming relations between China and Europe — Chinese prime minister Li Qiang visited France and Germany this week to discuss strengthening trade ties and combating climate change — Xinjiang-made cotton continues to be an area that Western brands will need to navigate carefully.
Moving production and supply chains out of China has been one way some brands like Patagonia have chosen to steer through the thorny issue. It is a move that Chinese fast fashion ecommerce brand Shein has also undertaken, although for a different set of geopolitical reasons.
According to the aforementioned Nikkei report, when reached for comment, Fast Retailing, Inditex and Skechers all refuted claims of employing forced labor.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.