Brands urged to resume use of Xinjiang cotton

The China Cotton Association has called on relevant companies to resume the use of cotton from Xinjiang Uygur autonomous region.

"We are looking forward to relevant companies actively responding to the concerns of Chinese consumers and industry organizations, resuming the use of cotton from Xinjiang, and taking practical actions to maintain the health and stability of the global cotton textile industry," the association said in a statement, which was published on Nov 30.

The comments follow a recent report by the BBC quoting Tadashi Yanai, CEO of Fast Retailing Co Ltd, the parent company of Uniqlo, who said that the fast fashion chain does not use cotton from Xinjiang in its products.

Uniqlo has previously said it does not disclose the origins of its raw materials and confirmed that there have been no recent changes to its manufacturing operations.

In response, a spokesperson for the Chinese Ministry of Foreign Affairs on Nov 29 expressed the hope that relevant companies would resist political pressure and undue interference while making independent business decisions aligned with their own interests.

China's Xinjiang Cotton Association said on Thursday that international brands should give full respect and trust to Xinjiang cotton and called on international brands to restore the use of cotton from Xinjiang.

The incident sparked public discussions with mixed reactions. According to a survey by Weibo, the country's leading microblogging platform, some netizens expressed strong anger and dissatisfaction, viewing the CEO's remarks as disrespectful to Chinese consumers, with some even calling for a boycott of the brand. Others questioned the motives, suggesting the comments might stem from misunderstanding or prejudice.

Among the surveyed individuals, nearly 45 percent said that they feel calm.

Meanwhile, some argued that while the remarks were inappropriate, consumers ultimately have the right to make their own purchasing decisions without undue interference.

China remains a critical market for Uniqlo. With 1,032 stores across the country, including 926 on the Chinese mainland, China ranks as Uniqlo's largest market by store count and second-largest by revenue after Japan.

In the fiscal year 2024 (September 2023 to August 2024), Uniqlo China reported a 9.2 percent increase in revenue, reaching 677 billion yen ($4.5 billion), while operating profit grew slightly by 0.5 percent to 104.8 billion yen.

However, "In recent years, Uniqlo has faced significant challenges in this market, with sluggish growth and increasing pressure from affordable alternative brands," said Jason Yu, general manager of CTR Market Research. "The company has also struggled to launch competitive, innovative technology-driven products."

Additionally, Uniqlo is encountering competition from local brands such as Shein in the international market, Yu added.

Despite the challenges, the company anticipates further revenue and profit growth, alongside marginal improvements in operating profit margins in China in 2025.

For fiscal 2025, it plans to open 60 new stores in the country.