© Reuters. PHOTOGRAPHY: Walmart signs are displayed inside the Walmart store in Mexico City, Mexico, March 28, 2019. REUTERS / Edgard Garrido / File Photo
BEIJING (Reuters) – Walmart (NYSE 🙂 Inc arm Sam’s Club, reacting to anger in China over what local media said was the deliberate removal of Xinjiang products from its app, denied the move in talks with analysts and called it a “misunderstanding” “.
Chinese social media and local news users criticized Sam’s Club, a member-only club that offers products and services, last week for removing products from its domestic online stores. The Chinese Anti-Corruption Agency accused the American retailer and Sam’s Club of “stupidity and short-sightedness” because of that.
A Sam’s Club spokesman told local analysts in a call last week by a domestic securities company that Chinese consumers were unable to find products from Xinjiang because the app does not support product searches based on place names.
In the invitation, the full recording of which was shared by one participant with Reuters, the representative was introduced as the regional e-commerce manager of Sam’s Club named Zhang.
“This is a misunderstanding,” Zhang said in an interview.
“We did not defend ourselves, because there is no reason to be afraid of things we did not do,” Zhang added. Another participant confirmed Zhang’s comments on the invitation, which also spoke about Sam’s Club’s plans in China.
Walmart did not respond to a request for comment. Neither Walmart nor Sam’s Club have so far publicly commented on the reaction to them in China, and Zhang has not commented on the situation in Walmart, which is also accused of removing products from the far west China region, both from its offline stores and apps.
The controversy, which prompted a wave of Sam’s Club customers in China to cancel their membership, highlights that foreign companies are walking the rope in China as they balance geopolitical tensions between China and the West with China’s importance as a market and supply base.
Xinjiang has become a growing point of conflict between Western governments and China, as UN and human rights experts estimate that more than a million people, mostly Uighurs and members of other Muslim minorities, have been detained in camps there.
China has denied allegations of forced labor or any other abuse in Xinjiang, describing the camps as vocational centers designed to fight extremism, and in late 2019 said all people in the camps had “graduated.”
In addition to Walmart, Swedish fashion retailer H&M and US chipmaker Intel (NASDAQ 🙂 have been under fire in China in recent months for adjusting their business in Xinjiang. In contrast, Tesla 🙂 (NASDAQ 🙂 has been criticized by US human rights groups for opening an exhibition space in Xinjiang on December 31st.
Chinese social media users have turned against Sam’s Club shortly after US President Joe Biden signed a law banning imports from Xinjiang on December 23 over concerns about forced labor.
Zhang said Sam’s Club, which has 4.4 million members in China, saw about 500 customers cancel their membership cards in the central region. He did not give a number for the whole state.
“It has a negative impact on our membership base, but time will tell in the future,” he said.
“We think the potential in China is very great.”
China is a large market for Walmart, generating revenue of $ 11.43 billion during the company’s fiscal year ended Jan. 31. Of the 423 retail units Walmart operates in China, 36 are Sam’s Club stores, according to its website.