Nike CEO John Donahoe called the sportswear apparel giant a “brand of China” this week, months after the sportswear giant had entangled in a fiasco in China over its statements expressing concerns about human rights abuses committed in Xinjiang province by the Communist government.
According to the reports, Donahoe defended the firm’s business in China and stated that Nike had a long-term view of its operations in the Communist country, where it has been operating for over four decades. Donahoe said he remained confident that China will be their fast-growing market due to its many years of investment in the country.
“We are the largest sports brand there, and we are a brand of China and for China,” Donahoe said, adding, “And the biggest asset we have in China is the consumer equity. Consumers feel a strong, deep connection to the NIKE, Jordan and Converse brands in China. And it’s real.”
Speaking during a call with Wall Street analysts about Nike’s latest earnings report, Donahoe claimed that Nike intends to keep investing in its China operations as it reported better than expected revenues in its fiscal fourth quarter. Donahoe made the comments after released its Nike’s fourth-quarter earnings, which showed revenues had doubled to $12.3bn (£8.8bn) in the first three quarters of the year.
The latest figures show that Nike has bounced back from a $790m loss during the pandemic a year earlier to nearly $1.5bn profit. The figures also showed that revenue in China increased to more than $1.9bn, however, it missed Wall Street expectations of $2.2bn.
In addition, the shares of Nike has also hit an all-time high during Friday’s trading session, due to its strong financial results.
The comments by Donahoe over Nike’s possible more investments in China interestingly comes months after the sportswear giant had raised concerns about forced labour practices in the Xinjiang Uyghur Autonomous Region (XUAR).
Nike raises concerns about forced labour in Xinjiang province, faces backlash
In an official statement, Nike had stated, “We are concerned about reports of forced labour in, and connected to, the Xinjiang Uyghur Autonomous Region (XUAR). We have been conducting ongoing diligence with our suppliers in China to identify and assess potential forced labour risks related to the employment of Uyghurs, or other ethnic minorities from XUAR, in other parts of China.”
The company also specified, “Nike does not source products from the XUAR, and we have confirmed with our contract suppliers that they are not using textiles or spun yarn from the region.”
Joining Nike, several other brands such as H&M had made the statement last year stating that it will no longer be procuring cotton from Xinjiang after reports revealed forced labour by Uyghur Muslims.
However, the boycott by Nike and other apparel brands had not gone well within the Communist country, which had said companies’ decisions to avoid using cotton sourced from the region as an effort to undermine its economy.
These brands had become the target of netizens in China after their stance over Xinjiang cotton supply issues. The Chinese netizens had reportedly called for a boycott of these brands in China. Several celebrities, including pop star and then-Nike brand ambassador Wang Yibo, had said they would cut ties with the sportswear maker for their comments on forced labour in Xinjiang province.
The ‘slave labour’ in China
In Match 2020, the Australian Strategic Policy Institute (ASPI) had released a report on the condition of Uyghur and other ethnic minority citizens from the far west region of Xinjiang. The report detailed out how ethnic people from the said region have been mass transferred across the country. The conditions they work in suggest forced labour, the report said.
The report suggested that as many as 82 well-known global brands in sectors including technology, clothing and automotive sectors have such workers in their suppliers’ factories in China. These companies include major names such as Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen.
As per the report, more than 80,000 Uyghurs were transferred to different parts of the country between 2017 and 2019. Some of them were sent directly from the detention camps. The number included in the report was conservative, and the actual numbers can be much higher. These workers not only work as forced labour but have to undergo compulsory organised Mandarin and ideological training outside working hours. These slave labours are constantly under surveillance and not allowed to take part in any religious observations.