Does consumer neglect threaten corporate neutrality? | So Good News
…the damage to the reputation that the strike had caused the sales to increase so much that the company quickly turned around.
When a major retailer decided, a few weeks after Russia’s invasion of Ukraine, to keep its stores from opening, shoppers in Europe and beyond vowed to boycott the chain. It’s unclear how many actually did, but the reputational damage caused by the strike caused sales to soar that the company quickly turned around. Its fate seems to have prompted many other western companies to leave Russia as well. Western customers worried about geopolitics may turn to companies operating in other countries as well – and they’re not the only group looking to boycott politics.
When Russia invaded Ukraine, many companies that decided to remain – until the consumer debate that took place mainly on Twitter convinced them otherwise – were reflecting the sentiments of companies that for years have seen Western companies produce and sell their products in many countries with questionable politics. . or the history of human rights. Many traded in apartheid South Africa until a boycott by the white government forced them to leave. They are doing business in Myanmar and Saudi Arabia, despite the fact that the regimes of both countries have a bad record of human rights and commit military violence, in the case of Myanmar against the Rohingya minority and the case of Saudi Arabia against the Yemenis. But Western consumers have not responded by boycotting Western companies in these countries. To be honest, small groups of activists had criticized several brands in Myanmar, but until the Russian occupation of Ukraine there was no major boycott of Western companies.
…until the Russian occupation of Ukraine there was no major boycott of Western companies.
With western consumers, that is. But they are not the only ones on strike. According to a July 2022, a report by researchers at the Swedish National China Center, a Swedish government-backed think tank, between 2008 and 2021, Chinese consumers boycotted 90 foreign companies, with more boycotts taking place from 2016 onwards. Most of these guys, the researchers found, companies involved in North America, Europe, Japan or South Korea in the categories of clothing, cars, food and drinks: that is, retail sales. and Versace was also defeated Chinese consumers are boycotting TVin their places after it seems that they mean that Taiwan is independent, for example, not included on the map of China, where companies including Burberry were. focused on participating in the Better Cotton Initiative, which promotes cotton culture. Researchers at the National China Center found: “Boycotts were triggered by corporate statements or actions that appeared to challenge Chinese rule in Hong Kong or rule in Taiwan, or unfairly criticize China’s human rights record in Xinjiang,” Swedish National researchers found. China Center found. Cotton farming in Xinjiang province, a major source of cotton, involves the use of forced Uyghur labor; The June 2022 Uyghur Forced Labor Prevention Act bans US companies the use of cotton whose means of supply play a coercive role.
Strikes have clear effects on the industry. All companies that have suspended operations in Russia or withdrawn from the rest of the country to avoid consumer neglect – and thus damage to reputation – will lose money. Yes, some have left the country mainly because they think it is more important for people to have good morals, while spending money is more important. Others, however, are facing the new challenge of leaving the country to avoid consumer neglect and then extortion – or staying in the country with a damaged reputation.
Of course, companies considering leaving the country to avoid consumer boycotts are faced with another problem: what motivates consumers to boycott? What is available so far offers little guidance. Why did Russia’s attack on February 24th lead to a boycott of Russia’s annexation of Crimea in 2014? Indeed, why did Western consumers not react after the annexation of Crimea? Why didn’t they protest against Western nations operating in Saudi Arabia after journalist Jamal Khashoggi was killed? It is impossible to know. Indeed, the boycott of the Japanese retailer does not appear to have been triggered by sudden anger among Western consumers, rather than a hashtag project.
This means that the next time an incident or event will anger enough Western consumers, the company involved in the problem faces the risk of a boycott that can damage the reputation of the international community even if it only causes a small economic damage in the affected area. Meanwhile, Chinese consumers will continue to boycott companies they see as offending China, and consumers in other countries may begin targeting companies for specific products related to their countries.
This kind of invisible damage amounts to a huge financial loss, which is caused by consumer boycotts that are not well suited to the risks covered by insurers. Of course, because frequent consumer strikes from different angles are a new thing, there are many things that underwriters can use in the drawing. Consumer attitudes are changing, too: as older consumers focus more on quality and value in their consumer choices, a. 2021 survey conducted by market research firm Forrester found that more than half of American Generation Z consumers search to make sure they fit into their “corporate social responsibility.” But the takeover should start soon – especially as political tensions continue to grow, and consumer strikes are on the rise.