Adidas tops Weibo 'hot searches' list amid fallout from Xinjiang cotton ban as its Chinese affiliate gets fined for advertising violation
Published: May 13, 2021 02:42 AM
Adidas. Photo:IC

Adidas. Photo:IC

Adidas topped the hot searches list on Chinese social media late Wednesday after it was made public that a Chinese firm of the German sportswear retailer was slapped with a 50,000 yuan ($7,771) fine for violation of advertising content management regulations, amid the fallout from its involvement in the boycott of Xinjiang cotton. 

The local market regulator in the Suzhou Industrial Park imposed the penalty on the Chinese affiliate on April 20, the Chinese news site reported Wednesday, citing Chinese corporate database query platform Tianyancha.

The fine was the second administrative penalty the firm has received. The previous one was imposed on July 2020 by the fire and rescue authorities in Wuqing district in Tianjin when the affiliate company, founded in April 2007, was fined 18,500 yuan for occupying evacuation passages and safety exits.

As of Wednesday, the latest penalty hitting Adidas has been hovering on the trending list of China's Twitter-like social media platform Sina Weibo, attracting more than 3 million views. 

Earlier on Wednesday, revealed in another report that a Shanghai affiliate of Spanish fast-fashion retailer Zara has lately been slammed with a fine of 7,076.81 yuan for production and sales of unqualified items.

The market regulator in Shanghai's downtown Jing'an district levied the penalty on April 28. The Shanghai firm's illegal gains of 1,231.03 yuan were also confiscated.

Both Adidas and Zara have been facing continued backlash in the Chinese market over recent months as they are among western retailers that have shot themselves on the foot for boycotting cotton sourced from Xinjiang over groundless forced labor claims. 

The Chinese market is becoming the single most important for Adidas and its US rival Nike, factoring into sluggish global consumption amid the COVID-19 pandemic. Nike has also been embroiled in the cotton ban backlash.

According to its third-quarter financial disclosure, Nike's sales in China grew by 51 percent, offsetting declines in other markets, giving it a total growth of 3 percent. Sales of footwear were up by 50 percent and apparel by 54 percent in China.

For its part, Adidas disclosed in its 2020 annual financial report that, despite falling global sales, it still recorded a 1 percent growth in the Asia-Pacific region driven by a strong recovery in China where sales were up 7 percent.