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Unique: Walmart Arm Didn't Purposely Take away Xinjiang Merchandise, China's Exec Informed Analysts

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© Reuters. FILE PHOTO: Walmart signs are on display in a Walmart store in Mexico City, Mexico, March 28, 2019. REUTERS / Edgard Garrido / file photo

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BEIJING (Reuters) – Walmart (NYSE 🙂 Inc., Arms Sam & # 39; s Club, responded to the excitement in China over the deliberate removal of products from Xinjiang from its app, denying the move in a call with analysts, calling him "a misunderstanding".

Chinese social media users and local news outlets last week criticized Sam & # 39; s Club, a members-only warehouse club that sells products and services, for removing the products from its domestic online stores. China's anti-transplant agency accused the US retailer and Sam & # 39; s Club of "stupidity and myopia" in the matter.

A representative from Sam's Club told local analysts in a call organized by a domestic investment firm last week that Chinese consumers could not find products from Xinjiang because the app does not support searches for products based on place names.

The call, the full replay of which was leaked to Reuters by a subscriber, introduced the representative as the regional e-commerce leader for Sam & # 39; s Club with the surname Zhang.

"This matter is a misunderstanding," Zhang said when he called.

"We didn't defend ourselves because there is no need to be afraid of things we didn't do," added Zhang. A second attendee confirmed Zhang's comments on the call, which also spoke of Sam & # 39; s club's plans in China.

Walmart did not respond to a request for comment. Neither Walmart nor Sam & # 39; s Club have yet publicly commented on the backlash against them in China, and Zhang has not commented on the situation at Walmart, which has also been accused of selling products from the far western region of China from both its offline stores as well as from his app.

The controversy, which prompted a wave of Sam & # 39; s club buyers in China to terminate their memberships, underscores the balancing act of foreign companies in China to align geopolitical tensions between China and the West with China's importance as a market and supply base bring.

Xinjiang has become a growing source of conflict between Western governments and China, as UN experts and human rights groups estimate that more than a million people, mainly Uyghurs and members of other Muslim minorities, were held in camps there.

China has denied allegations of forced labor or other abuses in Xinjiang, labeled the camps as vocational centers to combat extremism, and declared in late 2019 that all the people in the camps had graduated.

MEMBERSHIPS CANCELED

In addition to Walmart, the Swedish fashion retailer H&M and the US chip manufacturer Intel (NASDAQ 🙂 have come under fire in China in recent months for adjusting their stores in Xinjiang. In contrast, Tesla (NASDAQ 🙂 has been criticized by US rights groups for opening a showroom in Xinjiang on December 31st.

Chinese social media users turned against Sam & # 39; 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 & # 39; s Club, which has 4.4 million members in China, saw around 500 shoppers canceling their membership cards in its central region. He did not give a nationwide number.

"It has a negative impact on our membership base, but time will tell everything in the future," he said.

"We think the potential in China is huge."

China is a huge market for Walmart, with sales of $ 11.43 billion for the fiscal year ended Jan. 31. Of the 423 retail units that Walmart operates in China, 36 are Sam & # 39; s club stores, according to its website.

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