The director of the firm behind global trend network Uniqlo has told the BBC that the Chinese firm does not use cloth from the Xinjiang region of China in its products.
It is the first day Fast Retailing’s chief executive Tadashi Yanai has immediately addressed the contentious issue.
China is a vital market for Uniqlo not just for users but also as a big production hub.
Xinjiang fabric was previously known as some of the best material in the world.
But it has fallen out of favour after revelations that it is produced using forced labour by people from the Muslim Uyghur minority.
In 2022, tough US regulations on the import of goods from Xinjiang came into effect.
Many international manufacturers removed materials using Xinjiang cotton from their racks, which led to furious reaction in China. Companies such as H& M, Nike, Burberry, Esprit and Adidas were boycotted.
Sweden’s H& M saw its clothes pulled from big e-commerce stores in China.
At the time, Mr Yanai – who is Japan’s richest man – refused to confirm or deny whether Xinjiang cotton was used in Uniqlo clothing, saying he wanted “to be neutral between the US and China”.
His decision not to take a part helped Uniqlo to be popular in China’s large financial market.
But speaking to the BBC in Tokyo about the firm’s actions to be more open about where the materials in its attire come from and how they are made, he said:” We’re certainly using [cotton from Xinjiang]. “
” By mentioning which cloth we’re using… ” he continued, before pausing and ending his reply with” Really, it gets to political if I say again but this halt below”.
Isaac Stone Fish, the deputy executive and chairman of Strategy Risks, a business intelligence agency with a China target highlights the pressures on organizations from both China and the US.
” No a single large business may be politically neutral again,” he says.
” Both Beijing and Washington want firms to choose sides, and Tokyo may continue to move close to the United States in this topic. “
Yet though Uniqlo has been expanding violently in Europe and the US, in Mr Yanai’s personal terms,” we are not a recognized company worldwide” and Asia is still its biggest market.
The company has more stores in China than in its home country Japan, and Mr Yanai says he does not plan to change that strategy despite challenges in the world’s second biggest economy.
“There are 1. 4 billion people in China and we only have 900 to 1,000 stores,” he says. ” I think we can increase that to 3,000. ”
Meanwhile, China is Uniqlo’s single biggest manufacturing hub. The company also makes clothes in countries including Vietnam, Bangladesh, Indonesia and India.
In 2009, when 80% of its products were made in China, Mr Yanai told the BBC that China was getting too expensive and the firm was shifting production away “to lower-wage Cambodia to keep prices low”.
He now says it was challenging to repeat China’s success as the world’s factory in other countries as transferring years of experience proved difficult.
Retailers like Uniqlo are also facing intense competition from ultra-fast fashion as brands like China’s Shein and Temu gain popularity with price-conscious customers.
But Mr Yanai says “ I don’t think there’s a future for fast fashion”.
” They’re producing clothes without any careful consideration which you only wear for one season. That is a waste of the planet’s resources. “
He adds that Uniqlo’s strategy is to focus on essential items that can be worn for years.
In the 40 years that he has been in charge of the firm, Mr Yanai has grown the business he inherited from his father from a company with annual sales of around 100 million yen ($ 656,700; £522,400 ) to a global chain with 3 trillion yen of revenues this year.
The 75-year-old says he aims to overtake Inditex, which owns the global chain Zara, as the world’s biggest fashion retailer before he retires.
But to achieve that, Uniqlo needs to expand not just in China but also in the West, where shoppers are increasingly conscious of human rights issues such as forced labour.
Mr Yanai’s ambitions may also face more hurdles as Donald Trump returns to the White House on a pledge to impose much higher tariffs on Chinese-made goods.