Nike chief executive John Donahoe gave an impassioned defence of his company’s business in China, months after the world’s largest sportswear brand became ensnared in a wider consumer backlash there due to its past statements on Xinjiang.
“Nike is a brand that is of China and for China,” Donahoe said on Thursday, in response to a question from an analyst regarding the competition Nike faces from other brands in the region.
In March, Chinese state media circulated a months-old statement from Nike which expressed concern over reports of forced labour in Xinjiang. More than 1m Uyghurs are known to have been detained in the western region, which produces more than four-fifths of China’s cotton.
The circulation of Nike’s statement at the time sparked criticism from celebrities, including pop star and then-Nike brand ambassador Wang Yibo, who said he would cut ties with the brand. Nike’s website has a statement saying it does not source any products or supplies from the region.
Shares of Chinese athletic brands which compete with Nike in the region, including Li Ning and Anta Sports, rose initially in early April amid the backlash to western brands, which also included Swedish fast-fashion chain H&M.
In financial results released on Thursday, Nike reported sales in Greater China of $1.9bn for the three months ended May 31, up 17 per cent from the same period in 2020.
For the company as a whole, revenues doubled to $12.3bn for the quarter, helping it swing to a $1.5bn profit, up from a $709m loss a year earlier at the nadir of the pandemic. Nike’s shares rose 14 per cent in after-hours trading in New York.
Donahoe attributed the company’s success in Greater China in part due to its decades-long investment there. “We have been in China for over 40 years,” he said, a connection established by Phil Knight, Nike co-founder and former chief executive.
Donahoe, who took the helm in January 2020, spent the early days of his tenure visiting Nike’s operations in China. He said the company’s “biggest asset is consumer equity [in the brand] . . . it’s real, I saw it in my first week on the job”.