Swedish fashion retailer H&M was found to have resumed its businesses on China’s e-commerce giant Tmall on Tuesday 16 August, 16 months after the brand was taken down by the Alibaba-owned online shopping site on 24 March 2021 following the brand’s criticism over forced labour in China’s Xinjiang province and pledged not to use cotton from the region.
Nationwide backlash soon followed after H&M’s statement, with Chinese consumers calling for a boycott and online marketplaces including Tmall’s sister app Taobao, Pinduoduo and Alibaba’s rival JD.com were swift to remove all H&M products from their sites. The brand also faced a series of celebrity cancellations, including its two brand ambassadors, actor Huang Xuan and singer Song Qian.
The fallout of the Xinjiang cotton controversy took a further toll on H&M’s performance in China, resulting in sales plummeting by 28% ($74 million in value) in the second quarter of 2021. The brand saw 60 store closures in mainland China by the end of 2021, accounting for 12% of H&M’s total store installations in the country.
The downswing continues in 2022 with another 40 outlets shut down in the first quarter, throwing the brand’s lower-tier market penetration ambition in China into question. And in June, the journey of H&M’s first and largest flagship store located on Huaihai Road, one of the busiest shopping districts in the metropolitan area of Shanghai, came to an end.
While neither H&M nor Tmall have provided any explanation as to the reason behind the re-opening, whether the brand can regain Chinese consumers in the digital market space remains in question. H&M’s Tmall flagship store has lost nearly 5 million followers compared to its 19 million prior to the controversy. The unforgiving sentiment amongst the public also reflects on the so far lacklustre sales, which saw the “bestseller” of all the brand’s offerings – a men’s T-shirt priced at 39.9 RMB ($5.89) record 15 purchases, while no interest has been shown to other products.
Adding to the concern is the comeback appears to have revived the national blowback, with Chinese netizens showing a firm stance on boycotting the brand, saying “I won’t buy anyway even if you re-launch” while others are blaming the e-commerce platform for allowing the business to return.
In addition, despite their reappearance on Tmall, H&M seems to be under a search limit on the platform as the flagship store can only be found after a full name search and no result is returned under the keyword “HM”. The brand’s stores on other online retail platforms including Pingduoduo and JD.com have not yet resumed business at the time of publication.