Amid a rising wave of nationalism, Chinese shoppers have mounted at least 78 boycotts of foreign companies since 2016, more than six times the number seen in the preceding eight years, a new study found.

And while consumer brands all face the same complex operating environment in China, how they get out of hot water differs depending on the issue, according to research by the Swedish National China Centre. In general, companies quickly apologise when they’re being boycotted for issues around territory China considers sovereign, but far less frequently when it comes to the topic of alleged human rights violations.

More than 80 percent of companies apologised upon facing backlash for actions or advertising seen as infringing on China’s territorial integrity, such as the status of Taiwan and Tibet or the pro-democracy protests in Hong Kong. By contrast, only about a quarter of firms expressed regret after making a stance against sourcing products from Xinjiang — the province where China is accused of human rights violations against the ethnic Uyghur group — stirred social media furore.

The varying degree of sensitivity at play is reflected in how the same company responded differently to boycott threats. Walmart Inc. apologised in 2018 over a signboard in one of its Chinese stores that listed Taiwan, and not China, as the origin of some products, but did not in 2021 amid social media allegations that Xinjiang-sourced products were taken off shelves, according to the study.

The findings underscore how China’s 1.4 billion shoppers have gone from untapped goldmine to potential minefield for global consumer brands. With Asia’s biggest economy facing off with the US and others on everything from trade to cybersecurity and human rights to origins of the coronavirus pandemic, Chinese shoppers have become an economically powerful arm of Beijing’s political agenda, hurting revenue growth for companies from Nike Inc to Hennes & Mauritz AB.

Domestic Alternatives

“The emergence of alternative domestic products in China and a rise in online nationalism are putting a lot of pressure on global brands,” said Hillevi Parup, co-author of the study in an email interview. “Consumer boycotts are on the rise in China and this trend doesn’t appear to be going away anytime soon.”

Despite the hostile atmosphere, nearly half of the targeted companies weathered controversies without a public apology, according to the study. H&M — the biggest corporate target in the Xinjiang-related boycott wave last year — didn’t apologise, stating that it has always respected Chinese consumers and was devoted to its long-term growth in the country. The clothing brand is still canceled on nearly all e-commerce platforms to date.

The researchers also found that the public reaction to company apologies “appears arbitrary.” In some cases, an apology led to further backlash with social media users calling out firms such as Hugo Boss AG for being “two-faced.”

“An apology isn’t a safe bet,” Parup said. “Based on our observations, the best option may be to try to avoid the public eye altogether.”

Intense Scrutiny

The varying apology rate could be due to intense scrutiny on Xinjiang’s forced labor issue in Europe and North America. While firms may be able to stomach the reputational cost of being less supportive of Taiwan’s sovereign claim, for example, “it is much harder to imagine that they would be comfortable with accusations of being implicated in what some western parliaments and governments have labeled genocide,” the study said.

Intel Corp. apologised in December 2021 after its opposition to Xinjiang labor sparked a backlash in China. Soon after, then-White House Press Secretary Jen Psaki said that “American companies should never feel the need to apologise for standing up for fundamental human rights or opposing repression.”

The study also found that the economic payoff of toeing China’s line was unclear. Both Hugo Boss and Burberry faced Chinese consumers’ ire for statements related to Xinjiang. Hugo Boss apologised and Burberry declined to comment but neither saw a significant drop in sales, it said.

The think tank examined boycott incidents between 2008 and 2021. Besides the general intensification since 2016, researchers found that boycotts reached a peak in 2019, when the US-China trade war was playing out.

The Swedish National China Centre was established last year and is largely funded by the Swedish government to inform policy makers and businesses about China.

Other key findings from the study:

• Companies from the US, Japan and France were the most frequently targeted
• Those in the food and beverage, luxury goods and automotive sectors — especially ones with local Chinese alternatives — faced the most boycott calls
• Firms should avoid “switching positions,” which is typically met with more severe criticism

The targeted attacks by Chinese consumers in recent years have also displayed evidence of state support, according to the study. State-run media, for example, supported a 2019 campaign against luxury brands, including Coach, Versace and Givenchy, for failing to respect China’s territorial integrity.

“We have found evidence of state support in nearly a third of all boycotts,” Parup said. “But this figure likely underestimates the true level of state involvement.”

By Yasufumi Saito and Jinshan Hong