Lancôme’s Hong Kong problem: Although I don’t usually cover the beauty industry (GoBlu’s clients are typically fashion and outdoor retailers or apparel and textile manufactures), the proximity of this case to clothing brands may provide some productive lessons.
The story starts with a good promotional idea: Lancôme agreed to support a concert by Cantopop star, actress and columnist Denise Ho in Hong Kong. Ho is a popular identity and would normally guarantee significant publicity. But a couple of weeks before the scheduled event, the Chinese government-controlled Global Times tried to whip up support for a boycott of Ho’s concert by posting a survey on China’s social media platform Weibo asking users to comment on Lancôme’s decision to invite an artist who supported Hong Kong and Tibetan independence (Ho was a high-profile supporter of the 2014 Hong Kong protests – the so-called Umbrella Revolution – and protested on the streets herself). As a result, Lancôme announced it would abandon the June 19 gig. Unsurprisingly, Hong Kong’s social media lit up with scathing attacks on the brand for cancelling. In an effort at damage control, the company announced the cancellation was due to “possible safety reasons”.
Very few bought it. Ho released a statement criticising Lancôme for “kneeling down to a bullying hegemony”, leading to locals swamping shopping centres to protest at Lancôme booths. The brand closed all 23 of its boutiques across the city, and parent company L’Oreal did the same for other brands in its stable, including Kiehl’s and The Body Shop. After tempers cooled, and L’Oreal offered Ho compensation, the Global Times weighed in again: “Apparently Lancôme is more inclined to take care of the emotions of the people on the mainland. The reason is very simple: the size of the mainland market is multiple times that of Hong Kong. This row shows that members of the public in mainland China have realized their impeccable power to influence the market … From now on, they will no longer be kind towards celebrities or anyone who makes money out of China but at the same time criticizes China.”
Celebrity endorsements are critical in Hong Kong (and in China, too). But with more speaking out on the city’s political future, brands are finding themselves between a rock and a hard place. And not just over celebrities; Joshua Wong (one of the leading lights of the Umbrella Revolution) also called for people to boycott the company. Things are unlikely to get easier in the medium term, so brands will need to walk a delicate line between the two markets. See more at the following (13 Jun 16, 10 Jun 16, 08 Jun 16, 07 Jun 16).
M&S launches interactive supply chain map: Marks & Spencer released its 2016 Plan A Report last week, along with a human rights report and an interactive supply chain map listing 690 clothing and home suppliers (09 Jun 16).
Nike partners with China’s Ministry of Education: Nike has extended an existing partnership to improve the health of over two million Chinese children by developing a physical education curriculum in primary schools (13 Jun 16).
Ralph Lauren pushes for shorter lead times: Facing a declining share price, Ralph Lauren has announced it will cut eight percent of its workforce and “work with its supply chain to reduce lead times … by six months” (09 Jun 16).
Top brands failing on cotton sustainability: The majority of international companies using most cotton globally are failing to deliver on cotton sustainability according to new independent research published today by Pesticide Action Network (PAN) UK, Solidaridad and WWF. Only eight companies out of 37 made it out of the red zone in the ranking research conducted by Rank a Brand. Only home furnishing giant IKEA, who top the ranking, score in the green zone with 12 out of a maximum of 19.5 points. C&A (9), H&M (9) and Adidas (7.75) follow in the yellow zone, while Nike (6.75), M&S (5.5), VF Corporation (3.25), and Kering (3) are in the orange zone. Another 29 companies fall in the red zone and appear to do virtually nothing on cotton sustainability (03 Jun 16 – where you can see the full table). For the full report (Sustainable Cotton Ranking), see here (downloads as PDF). For a companion report - Mind the Gap - Towards a more Sustainable Cotton Market – see here (downloads as PDF).
Fashion law blogger takes issue with cotton sustainability report: Julie Zerbo, founder and editor-in-chief of The Fashion Law, wonders how credible the Sustainable Cotton Ranking report really is. Her main objection is based on the high ranking achieved by H&M, “which is known for its poor manufacturing oversight, dirt-cheap textiles, rampant greenwashing initiatives, and its connection with repeated manufacturing tragedies”. Of particular note, says Zerbo, is the reports failure “to address a core element in connection with the cotton industry: Child and forced labour” (07 Jun 16).
Better Cotton Initiative releases 2015 annual report: The headline news includes: BCI membership grew by 50 per cent in 2015; positive results on the ground (e.g., BCI farmers in India raised yields by 11 per cent while cutting synthetic pesticide use by 20 per cent); 1.6 million farmers reached (1.5 million of whom are licensed); BCI better cotton accounts for 11.9 per cent of global production. And so on. You see report highlights at a glance here, or the full report here (downloads as PDF).
PETA uses shareholding in Hermès to confront company about exotic skin use: Last year, to put pressure on the company to stop using exotic skins, PETA bought shares of Hermès International on the Paris stock exchange. Last month, PETA put those shares to use by attending the Hermès annual shareholders’ meeting in Paris, publicly confronting Hermès CEO Axel Dumas over the issue (01 Jun 16).
Website launched to battle shopping addiction: Ecommerce platform VeryFirstTo has partnered with Action on Addiction to combat shopping addiction. The company now hosts the Action on Addiction logo on its homepage, which redirects to a page educating and helping to diagnose potential shopping addictions (08 Jun 16).
Alibaba’s Jack Ma says fakes are better than originals: Mr. Ma said “the problem is the fake products today are of better quality and better price than the real names. They are exactly the [same] factories, exactly the same raw materials but they do not use the names”. He also noted that “Chinese manufacturers are growing impatient with a global division of labour in which they make high quality goods only to see much of the money pocketed by brand owners” (14 Jun 16).
CBP officers in West Palm Beach seize over $2 million in counterfeit merchandise: U.S. Customs and Border Protection have seized numerous pallets containing hundreds of boxes of counterfeit products including footwear and handbags. The merchandise was shipped from China and destined to Nassau, Bahamas. The seized merchandise has an estimated Manufacturer’s Suggested Retail Price of over $2,000,000 (14 Jun 16).
Spike in pollution violations in China textile industry: This is a subscription-only story, but I’m including it because it points to a worrying trend in China: “violation records for dyeing and finishing in China rose from 293 in 2012 to 981 in 2013 and 1,250 in 2014, with preliminary findings for 2015 pointing to a continued upward trend” (08 Jun 16).
Court victory in Indonesia on wastewater discharge: Greenpeace Indonesia, together with community groups Pawapeling, Walhi (Friends of the Earth Indonesia), and Legal Aid Bandung have won a lawsuit against the government’s decision to continue issuing wastewater discharge permits to three textile companies – PT. Kahatex, PT. Insan Sandang Internusa and PT. Five Star Textile (01 Jun 16).
Outdoor Industry Association and Sustainable Apparel Coalition partner to ensure broad adoption of Higg Index: The OIA and SAC have signed a new memorandum of understanding to drive environmental and social best practices in the global apparel, textile and footwear supply chain by ensuring the broad adoption of and alignment around the Higg Index as the “go-to” supply chain sustainability management tool for the companies in the industry sectors in which it applies, starting with apparel and footwear (06 Jun 16).
Despite the Sustainable Apparel Coalition, there’s a lot you don't know about that t-shirt: According to the Guardian, “An ambitious effort by a global apparel industry group to measure the social and environmental impact of making clothes and shoes has yet to deliver on its promise” (14 Jun 16). The main criticisms are that companies have been slow to take up and use the primary tool (the Higg Index) and a lack of transparency about findings when they do.
What goes into your cheap t-shirt? According to the Nation, it’s “overwork, abuse, and economic destabilisation”. The article focuses specifically on Walmart (06 Jun 16), and is based on a research report by the Asia Floor Wage Alliance (AFWA) titled Precarious Work in the Walmart Global Value Chain (see report here, downloads as PDF).
New York’s coolest ethical fashion brand? According to Grin News (the home for good news), the honour goes to IMBY. The brainchild of Sara Weinreb, everything sold on IMBY is: i) made in America, sustainably; and ii) is under $200 dollars (04 Jun 16).
Sustainable sunglasses from Sweden: Resulting from a successful Kickstarter campaign, SideRoot makes sunglasses out of eco-friendly/bio-degradable material. This isn’t an area in which consumers have shown much interest, so I wish them success.
What does it take to launch an ethical fashion brand? Speaking of ethical fashion brands, Eco Warrior Princess has an interview with Hanna Baror-Padilla, founder of Sotela (an online retailer). She says that “the first questions I get asked when I tell someone that Sotela is an ethical fashion company that only uses eco-friendly fabrics [are], “how much would your dresses cost?” and “wouldn’t it be cheaper to produce in China?”” All the best to her (05 Jun 16).
Uniqlo will launch Indonesian-inspired batik collection to aid female factory workers: Uniqlo plans to unveil its new batik motif collection in Indonesia this month, with a portion of proceeds going to women in its factories in Indonesia (07 Jun 16).
How much does it cost to make a running shoe? Good question. Here’s another one: what kind of money do brands and stores make on a pair? You can read all sorts of answers online (this site says Jordan’s retailing for $200 are made in China for $5). But what’s the truth? This article has all the answers (22 May 16). Let me know if you guessed right.
The hidden dangers of male modelling: This kind of story is usually about female models, so it’s interesting to see Newsweek run this (06 Jun 16).
Families of 2012 factory fire victims in Pakistan seek redress in German court: On 11 September 2012, more than 250 workers lost their lives in a fire at the Ali Enterprises garment factory in Karachi. Its main customer was KiK Textilien und Non-Food GmbH (KiK), a German textile discount store chain that accounted for nearly 70 per cent of the factory’s output. In mid-2013, KiK agreed to a compensation pay out (of which $1 million was disbursed), but backed away from the agreement after a report claimed the fire was the result of arson (linked to a local extortion attempt). In March 2015, four people affected by the fire (one of them a survivor) filed a case against KiK in a regional court in Dortmund, supported by the National Trade Union Federation in Pakistan and other international organisations, including the European Commission for Constitutional and Human Rights, Clean Clothes Campaign and Medico International (05 Jun 16). In a related development, the ILO announced in late May that it would undertake a fact-finding exercise to review the “most rapid way of delivering the financial assistance due to the victims of Ali Enterprises”. The ILO will be assisted in its work by the German Federal Ministry of Economic Cooperation and Development (BMZ), making it the first time a foreign government has pushed for a compensation process in Pakistan (27 May 16).
Are soft loans replacing traditional supply chain bribes? I thought this article on a new type of bribery in supply chains by Omega Compliance was interesting: “One example is suppliers offering soft loans as a favour or perhaps in place of traditional bribes. Not only is a loan a conflict of interest but, should the loan go unrepaid, it now becomes an illicit payment” (06 Jun 16).
Living Wage Now! The Asia Floor Wage Alliance (AFWA) has released a documentary with garment workers and their allies from across Asia calling for living wages in the garment global production network. Watch on YouTube (08 Jun 16). The documentary records first-hand accounts of garment workers and their daily struggles in the face of poor pay, excessive overtime, unsafe working conditions and widespread sexual harassment (10 Jun 16).
New International Labour Convention to protect supply chain workers? Jan Furstenborg’s commentary on the ILO Labour Conference earlier this month notes that much of the discussion this year has centred on “often unacceptably poor working conditions in global supply chains, as well as the all too common human rights violations”. Workers’ groups have raised the issue of a new convention, but met resistance from employer groups. Jan has some words for international unions launching attacks on voluntary social responsibility schemes and initiatives (07 Jun 16).
HRW calls on governments to regulate supply chains: Governments should better regulate businesses to prevent child labour in global supply chains, Human Rights Watch said in a video released last week. Millions of children risk pain, sickness, injury, and even death to produce goods and services for the global economy. Human Rights Watch has documented hazardous child labour in agriculture, mining, the leather and apparel industry, and other sectors (06 Jun 16).
Canadian consumers may be unwittingly buying goods made by child labourers: So says a new report from World Vision Canada called Supply Chain Risk Report: Child and forced labour in Canadian consumer products. The organisation is calling for a new law to force companies that do business in Canada to report annually on the measures they take to ensure that factories in other countries aren't using minors to make products for the Canadian marketplace (09 Jun 16). You can download the full report here (PDF).
Fair Factories Clearinghouse upgrades its supply chain software: FFC has announced a major upgrade to its Corporate Social Responsibility (CSR) software. FFC helps brands like adidas, Pentland Brands, Puma and VF Corporation make more informed and ethical business decisions based on key performance indicators and social and environmental reports on working conditions (09 Jun 16).
(Image, Paweł Kadysz).