A wave of patriotic sentiment-driven buying fueled by the cotton controversy in the Xinjiang region is helping shares of Chinese sportswear manufacturers outperform big global brands, starting with Nike.
The support of the Chinese consumers in response to alleged human rights issues in the Xinjiang region, it has made some local sneaker manufacturers grow by about 275% this year. L’Bloomberg index of Hong Kong-listed apparel and retail stocks hit its highest level since 2015. Meanwhile, Nike and Adidas have risen less than 15%.
Rising geopolitical tensions over Xinjiang forced labor allegations have become a serious threat to global companies seeking to operate in China. Companies such as Anta Sports Products Ltd. and Li Ning Co., which have advocated using materials from the controversial Far West region, have gained market share as the Chinese move away from the foreign brands they express concern.
While Nike recently posted better-than-expected results as sporting events and consumer spending pick up again, the $ 250 billion US giant is still struggling in China, where Western brand sales have cooled since March. . The shift in local preference towards Chinese products could receive a further boost ahead of the Beijing 2022 Winter Olympics, for which Anta will be an official supplier.
Anta, which owns the rights to the Fila brand in China, it rose to all-time highs, pushing its market value to over $ 60 billion. Li Ning, a company founded by a gold medal-winning Olympic gymnast, has seen her shares jump more than 65%. Earnings for smaller rivals were even more surprising, with 361 Degrees International Ltd. and Xtep International Holdings Ltd. more than tripling.