Nike products withdrawn in mainland China after Instagram misstep

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Nike opted to pull off a new shoe design in mainland China after a politically sensitive image was posted to Instagram by one of its designers.

The issue overshadowed a solid result from the sportswear giant (scroll down for cover)

The image supported protests in Hong Kong – whose information was heavily censored on the mainland – and was posted to an account owned by one of Nike’s partner fashion brands in Japan, Undercover, which collaborated to the shoe.

Nike’s retail partners began removing the shoe from sale after the release, with some vendors posting announcements that Nike had given urgent instructions to stop the shoe from being released. The pullback may have been a response to a backlash against the brand on Chinese social media for its apparent bias with Hong Kong.

Violating politically sensitive issues has proven to be costly for many companies attempting to do business in China, as nationalist sentiments spread virally on platforms such as WeChat and Weibo can decimate the brand’s credibility from day to day. next day for crossing the line.

Undercover’s Instagram post has since been removed and the company claimed the content was an “independent opinion” posted in error.

Rising profits

Meanwhile, Nike’s net profit increased to $ 4 billion in fiscal 2019, more than double the figure of $ 1.9 billion last year.

However, the large disparity is attributed to the enactment of the tax law last year, which raised Nike’s effective tax rate to 55.3 percent, resulting in a 54 percent drop in profits. This year, Nike’s tax rate has returned to a more normalized level of 16.1%.

Nike Chairman and CEO Mark Parker told investors yesterday that this year is a pivotal year for the company.

“Our distinctive innovation and numerical advantage have led to accelerated growth of our entire portfolio, while our brand has fueled closer relationships with consumers around the world,” he said in a statement.

Revenue increased 7% to $ 39.1 billion, driven by sportswear, Jordan and running, as well as strategic investments in innovation and digital led by Nike Direct.

The Converse brand saw revenue rise 3% to $ 1.9 billion, mostly driven by double-digit growth in Asia and in digital.


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