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Burberry catches the backlash as China retaliates against Uigher sanctions

Burberry PLC (LON:BRBY) has been scrubbed from a popular Chinese video game and seen one of its brand ambassadors resign following Western allegations about human rights abuses by China.

Britain has joined with other Western countries to impose sanctions on China over the claims of systematic rights abuse of the Uighur community in Xinjiang.

According to Reuters today, Burberry’s famous red, black and tan design has already disappeared from characters in “Honor of Kings”, one of China’s top video games and published by online giant Tencent Holdings.

Chinese actress Zhou Dongyu meanwhile ended her brand ambassador role with Burberry as it has not “clearly and publicly stated its stance on cotton from Xinjiang,” her agency said.

Burberry is part of a group called the Better Cotton Initiative that in October said it would stop sourcing cotton from Xinjiang, where China has been accused of mass detainment, torture, forced labour and sterilisation, all claims that have been denied.

China is a huge market for Burberry and the brand is incredibly popular. In its last half-year, sales from the Asia Pacific region totalled more than 50% of the £860mln retail total.

JP Morgan noted that Tencent’s partnership with Burberry was only signed in November and only got going last week.

Other western consumer product groups have also come under similar pressure in recent days according to the US broker.

Adidas, Nike and H&M have all been targeted by negative comments on local Chinese social media and press reports due to their stance on cotton sourcing from Xinjiang, JPM said.

On Wednesday, H&M started to receive negative social media comments and was removed from most Chinese e-commerce platforms (including Tmall, Taobao, and Pinduoduo), its store information removed from Chinese navigation providers, and its mobile app banned from Chinese app stores.

Reports today also suggested that China’s top ride-hailing app Didi Chuxing has dropped H&M after the circulation of a statement from last year that said it would no longer source cotton from Xinjiang

Hong Kong Cantopop singer Eason Chan, Angelababy, Jackson Yee, Yang Mi, Jackson Wang, Liu Yifei and other local brand ambassadors have also cut ties with adidas while Nike local brand ambassadors have also ended their relationship, said JPM.

Reuters quoted a tweet from one Hong Kong politician, Regina Ip, who said: “Burberry is one of my favorite brands. But I will stop buying Burberry products. I stand with my country in boycotting companies that spread lies about Xinjiang.”

Shares in Burberry dropped 1.6% to 1,872.5p.


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