10 months ago| article
Both brands reported plummeting sales on China’s e-commerce channel, Tmall, in April
May 10, 2021 04:01:00 AM | Article | Gemma Williams Share - 
Two sportswear giants at the heart of China’s cotton crisis have seen their sales plummet on Alibaba Group’s Tmall—the country’s largest B2C e-commerce platform.
Adidas and Nike both saw massive dips from a year ago, the former was 78% down in April, while the latter fell by 59%. In March, boycotts were enforced on a number of international brands based on their positions regarding Xinjiang cotton. The issue is likely to further impede adidas’ upcoming auction of Reebok. According to Reuters, the German company is said to be expecting bids from local leaders Anta Sports and Li Ning, which might now be in jeopardy.
Many brands have fallen out of favor with Chinese consumers and while reputations are often damaged, transactions normally resume after a cooling off period. Hugo Boss has already reported a boom in sales despite also being blacklisted. On the other hand, Puma, which is also barred, is bracing itself for a hit.
One of the complications here is how deeply sportswear brands are embedded in Chinese icon culture and reality TV—the stars of which often opt for athleisure lines and labels. Recently, China has been blurring out the logos and brand names on popular shows like Chuang, Youth With You and even Sisters Who Make Waves. While this has made for some comical viewing (and disruptions in broadcasts), the message is clear. This matter is far from over.
Furthermore, though both Nike and adidas have been reinstated on Tmall, local preferences are evolving. Fila has replaced some boycotted brands on TV shows; however, more troublingly, mainland consumers are now seesawing towards homegrown brands, including Anta Sports and Li Ning. And, given the nuance of current geopolitical tensions, once you’re down, it might be harder to get up again. All eyes will be on earnings reports later this month for a clearer view.
