Will brands ever respond to China's protests? 19 consumer company earnings calls to watch | Following the yuan
Will brands ever respond to China's protests? 19 consumer company earnings calls to watch | Following the yuan
Reply to be added my master Google calendar for upcoming earnings schedule of Kering, Nestlé, L'Oreal, Prada Group, Swatch Group, Richemont and more
The past week’s rare display of defiance in China against zero-Covid policy may have quietened down with extensive police force and fear injected by searches and retribution, but it has only fueled resistance outside China, where protesters all over the world gathered to show solidarity.
In news, we’ve heard individuals, large social media account owners/information hubs (Hello Teacher Li!) and anonymous official sources speak, but what about the business world?
The first time I joined a protest, I marched down the streets in Brooklyn for Black Lives Matter in the summer of 2020, along with 15 million to 26 million people across the U.S., and got teary when I chanted with the crowds. It was something I didn’t think I was able to do.
Global brands were quick to respond in the wake of George Floyd’s death and their audience’s overwhelmed sentiment. A few Chinese designer brands and many social media users also posted black squares in unity, despite its debatable nature later on.
Fast forward to over 2 years later, with a completely different context, protestors and supporters are changing their profile pictures to blank/white, they share blank images as posts or illustrations of hands holding them on WeChat and Instagram. That gives the movement its name "A4 Revolution".
But where are the international brands?
It’s also probably the very first time they’re in such a situation. Given that most of them only set footsteps in China after 1989, where the mass social unrest and following deadly crackdown happened in the capital. Many only entered China in the 90s and even later, when the society proved itself to be stable, open and growing.
It would be suicidal to them in an authoritarian regime if their business gets involved in any capacity; responding is acknowledgment, and it’s the last thing they should do in a police state that intends to scrub collective memory every two or three decades.
They’d be scared to death if:
Any protest/relevant conflict happen at their physical establishment
any of their staff acknowledges the protests or take a side
Brand exposure in any capacity (worn/used by protestors)
Since last weekend, we’ve seen it all happen.
In an activist group, I’ve seen a poster of someone setting Starbucks in Xintiandi as a meeting point on Nov. 27, the day after the initial Shanghai protest, to rally people to march to the police station and demand the release of the arrested ones. A few hours later, people in the chat said the police already guarded their planned rendezvous.
On Nov. 28, the same thing happened at Hubin Yintai in77, a high-end mall in eastern e-commerce hub Hangzhou. Police were in place before protesters could gather:
On Nov. 28, Shanghai M&G Stationtionary (晨光), one of China’s largest stationary makers, felt the need to issue a notice through Shanghai Stock Exchange. There had been a forged official announcement making rounds on social media, saying that the company would stop selling A4 papers to "safeguard national security". The shares slumped as much as 3.2% intraday climbed back after it denied rumors.
Some Chinese users noticed that a police officer in plain clothes wears Li Ning, a homegrown sports brand that has revamped itself in recent years to champion Chinese patriotism. It’d be a very different story if, say, a protestor is seen wearing foreign brands.
While I’m still trying to make sense of these snippets thrusted from the intersection of business and politics, I couldn’t help but wonder … when and will international brands respond to the protests?
Chinese media is censored and so are the market analysts (these days in Hong Kong, too), so from whom can hear we honest opinions?
China is still an utterly important market for global consumer brands because in the best scenario, it provides unbeatable growth with “a large population base, vigorous consumer sentiment and strong growth momentum”, as state media Xinhua agency gloated.
This kind of delusion is dangerous, because many companies are taking pause due to political uncertainties and limited physical access to the market. Nonetheless, it reflects the state’s self-absorbed attitude and their expectation on how brands should behave in the country.
Inspired by
's Consumer Brands Industry Master Calendar, I've created my version for the upcoming earnings season, pulling together 19 consumer companies with large presence in China. It’d be interesting to hear whether any analysts would ask about protests and how the top executives respond.One thing that concerns me a lil bit is whether protests would still be relevant in Feb or this may quickly dissipate and be wrapped up in conversations about easing zero-Covid restrictions. We all know it’s more than that.
Reply directly to this newsletter so I can put you on the calendar, which will be regularly updated.
Companies on the list:
PVH [NYSE:PVH] (Calvin Klein, Tommy Hilfiger), Dec. 1, 2022, no mention
Starbucks [NASDAQ: SBUX] Feb 2, 2023
Estée Lauder Companies [NYSE:EL] (Estée Lauder, Bobbi Brown, Origins) Feb 2, 2023
L’Oreal [ENXT: OR] Feb 9, 2023
Kering [EN Paris: KER] (Gucci, Balenciaga, etc.) Feb 15, 2023
Nestlé [SWX: NESN] (Nescafe, Perrier, Blue Bottle Coffee, etc.) Feb 16, 2023
Swatch Group [SWX: UHR] (Swatch, Harry Winston, Longines, etc), mid-March
Prada Group [HKEX: 1913] (Prada, Miu Miu, Church’s, etc) , By 17 March 2023
Richemont [SWX: CFR] (Cartier, Piaget, Net-a-Porter, etc.) May 12, 2023
Companies with TBD dates:
Apple [NASDAQ: AAPL]
Farfetch [NYSE: FTCH]
LVMH [ENXT: MC] (75 brands including Louis Vuitton, Moët & Chandon and DFS)
YumChina [NYSE: YUMC; HKEX: 9987] (KFC, Pizza Hut, Taco Bell, Lavazza, etc.)
Capri Holdings [NYSE: CPRI] (Versace, Jimmy Choo, Michael Kors)
Coty [NYSE: COTY] (Rimmel, beauty lines of Gucci, Burberry, etc.)
Tapestry [NYSE: TPR] (Coach, Kate Spade New York, and Stuart Weitzman)
Moncler Group [BIT: MONC] (Moncler, Stone Island)
Shiseido [Tokyo: 4911] (Shiseido, NARS, etc)
SMCP [EPA: SMCP] (Sandro, Maje, etc.)