Don't bother. These wild guesses about foreign brands are simply rumors
US-based apparel maker Gap opened a new store in Qingdao, Shandong Province, last week. It may not seem like much, but for Gap, it is the best way to dispel rumors spread on social media that the company is abandoning the Chinese market.
"After about 12 years of development, Gap has well established an omnichannel business model in China," said Chris Mohler, general manager of Gap China, addressing the new opening.
"While the Chinese market is one with rapid changes and strong competition, we remain confident about the long-term, sustainable development here," Mohler said.
It is a straightforward response to a wave of "concerns" that Gap, known for its jeans and hoodies, will leave China after some stores in Beijing and Shanghai began offering deep discounts on products.
I'm skeptical of reports that paint a bleak picture of foreign brands in China. Some "earnest" people predicted an exodus after some big names, particularly in the consumer goods sector such as IKEA and L'Oreal, shut down some stores in China.
The basic rules of news ethics tell us that it is not right to make such a judgment without verification from the company. And it is rash to reach such a conclusion without the consideration of complicated business formats and sales channels nowadays in the country.
Take Maybelline New York, a cosmetics brand under the L'Oreal Group, as an example. The brand is simply making a strategy shift by moving away from its traditional department store business to focus on online channels. It is a far cry from "giving up" on the Chinese market, as some speculators would have us believe.
China has long been one of the most attractive markets for global companies. Even given the impact of COVID-19 resurgence, China's foreign investment has been resilient against retarded economic growth around the world.
According to data from the Ministry of Commerce, China's inbound foreign investment rose 17.3 percent year on year to 798.3 billion yuan (US$117 billion) in the first seven months, with South Korea, the US, Japan and Germany the fastest growth contributors.
Like Maybelline, Gap is adjusting its strategies to better match the fast-changing demand of Chinese consumers with innovation in business formats and sales channels.