The Japanese clothing and homeware brand, Muji, is publicly advertising their use of Xinjiang cotton despite Western retailers’ sales plummeting due to the powerful boycott against cotton from the region.
Muji has publicly sided with the Chinese government in a way that many Western and Japanese companies have not. Muji publicly advertises that it uses cotton from the Xinjiang region, where the U.S. State Department says Muslim Uyghurs are being forced to work in internment camps.
Last month, Muji’s parent company, Ryohin Keikaku Co., said it conducted an on-site audit at multiple farms and facilities in Xinjiang and found no evidence of human-rights violations. Prior last month’s statement, the company said it did not identify significant issues, other than small concerns that could be fixed. However, human-rights activities say it is difficult to be sure the audits are accurately assessing the situation in Xinjiang.
Ryohin Keikaku’s April statement said Muji’s use of cotton from organic farms was helping improve the lives of the people working there.
On its online store in China, Muji identifies the use of Xinjiang cotton on several items. The move was positively received by Chinese social-network users, some of whom said on Weibo, China’s Twitter-like platform, that they recognized the company’s eagerness to please China.
Muji executives have said that they see China as an opportunity for growth growth after company’s U.S. unit was forced last year to seek protection under U.S. bankruptcy laws. Muji expects to have over 300 stores in China by August.
However, while Muji may publicly advertise their use of the region’s cotton on their website, Muji executives have been cautious about commenting on the situation publicly. On the day Ryohin Keikaku confirmed the use of Xinjiang cotton, President Satoru Matsuzaki repeatedly declined to comment on the issue.
Kota Hirayama, an economist at SMBC Nikko Securities, said many Japanese companies fear cutting ties with China would deprive them of a large market of consumers and disrupt their global supply chain.
“In addition to losing sales there, Japanese companies could suffer from damage to the value fo their brand due to lower quality of their products,” he said. Similarly, he said, Japanese companies that choose to side with China may suffer reputational damage and lose business in the U.S. and Europe.
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