Subject: International Business Management

Group Instructor: Nguyen Kim Thao

4 Class: IBM_AV03K46

H&M and stop using Xinjiang cotton statement

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 Group members

Le Nguyen Huong Giang Vu Thi Nhu

Nguyen Nam Huy Nguyen Thi Ninh Giang

Nguyen Huynh Phuoc Khang Nguyen Thanh Ngan

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 I

Introduction
Studying international business
environment
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 ing
udy
f st
c e o
t an
por
e i m
Th
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 Learning outcomes
- The importance of well understanding the partner

- Each country has its own insights, especially about

politics, which easily receives a lot of severe arguments.

- Be careful with public statements, understand well

international business environment to minimize risks and
unforeseen consequences
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 Our talking points

Introduce the focal company

H&M’s approaches
The case for analysis

The case is related to Evaluate the approaches

International Business

Key issues/ problems of H&M Suggest alternative and better solutions

Implications for a similar situation

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 Introduce the focal company
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 H&M (Hennes & Mauritz)
● A Swedish multinational clothing - retail
company known for its fast-fashion
clothing for men, women, teenagers and
children

● Firstly, H&M was only a retail store in

Sweden.
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 H&M from the 80s-the 90s, the H&M brand began to spread in Northern Europe and Europe.

In 1976, first appeared in the By 2006, entered the Expanded in South America
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UK and in North America in Asian market in 2013 and in Africa in 2014

2000
 Nowadays, H&M is a very famous brand and has become one of the largest
fashion groups in the world.

74
countries
More than
5000 stores
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 The case for analysis

- March 2021, Britain, Canada, the EU and the US announced sanctions against Chinese government over the
treatment of Uyghurs in Xinjiang.

- China’s netizen look back to the “H&M Group statement on due diligence” posted in September 2020 believing
that H&M is the one that spread the rumor.

➔ H&M products have been formidably boycotted on all of Chinese commerce platforms.
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 Why does this case relate to international
business ?
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 - H&M currently operates 381 stores in mainland China

- Prior to the incident, H&M had been using materials

(specifically cotton) from Xinjiang which is under Chinese
government authority

- H&M’s actions are relevant to political and social factors of

macroeconomics.
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 Key issues/ problems of H&M
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 Case Analysis

Key issues/problems:

➔ Misunderstanding between brand and

marketplace, linking with political
conflicts.

Summary
- US human rights accused China of
mistreatment of Uyghur - a group of
Chinese ethnic minorities in Xīnjiāng (also
known as XUAR) province.
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 Summary
October, 2020 - H&M brought out a statement to stop
receiving supply chain of cotton from Xinjiang in
specific:

“We do not work with any garment manufacturing

factories located in XUAR, and we do not source
products from this region. We transparently
disclose names and locations of manufacturing
factories, mills and yarn producers in our public
supplier list and will continue to do so and further
accelerate this transparency for our global supply
chain.” - H&M, 2020
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 Summary
- March 26, 2021 - The United States banned all goods
produced in China's western Xinjiang region.

- Chinese reaction toward H&M:

+ Communist Youth League of China posted a
message on Weibo:
“Spreading rumors to boycott Xinjiang cotton, while
wanting to make money in China? Wishful thinking!”.
+ H&M disappeared from online shopping platforms
such as Alibaba, JD.com,...
+ State TV released photos mocking H&M
+ Celebrities broke ties with H&M
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 ➔ Chinese star
Huang Xuan
the spokesperson of the
Swedish brand
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 Political Factor
- The campaign was pioneered and
leaded by the Chinese government.

- The US and European governments

were involved in the situation.
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 H&M’s approaches
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 H&M’s actions:
- Notices about stopping sourcing products in Xinjiang no
longer appear on H&M's website
H&M’s commitment to the China remained strong

The brand has held weekly talks with Alibaba

about returning to the online platform.

H&M has agreed to change a "problematic map" online

following government criticism
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 Evaluate the
company’s
approaches
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 On the one
hand
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 “Give in”
- Deleting posts about Xinjiang cotton.
- Constantly making announcements with

On the other
content that esteem great collaboration
with the Chinese market.

hand
- Editing the map to legalize the “nine-
dash line” ( đường lưỡi bò) following the
request of the Chinese government.

→ H&M is ready to do whatever it takes to please

the Chinese people with the aim of coming back to
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this market.
 Obviously, being criticized so fiercely is
something H&M could not have foreseen, but
being too greedy to not want to lose any
markets has made H&M act wrongly again and
again.
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― Irene M. Pepperberg
 Suggest alternative and better solutions
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 H&M should keep the status quo, not
make any political points
and wait for the down.
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 Focus on building a more
strong brand
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 II
Implications for
firms/managers in a
similar situation
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 Research carefully about the political environment
before entering the new market
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 Avoid sharing political opinions
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 Pay attention political volatility and
identify threats to business
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 Thank you!
Do you have any questions?

Group 4
Le Nguyen Huong Giang
Nguyen Nam Huy
Nguyen Huynh Phuoc Khang
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Vu Thi Nhu
Nguyen Thi Ninh Giang
Nguyen Thanh Ngan