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Diplomatic spat could spur ‘soft boycott’ of Canadian brands in China, expert warns

Click to play video: 'Tit for tat spat: China hints at further retaliation over diplomat’s expulsion'
Tit for tat spat: China hints at further retaliation over diplomat’s expulsion
WATCH: After ordering Canadian diplomat Jennifer Lynn Lalonde out of Shanghai, the Chinese government is hinting at further retaliation to Canada's expulsion of Chinese diplomat Zhao Wei. Mercedes Stephenson reports – May 9, 2023

Experts say souring relations between Ottawa and Beijing could affect Canadian companies in China, potentially tarnishing the appeal of Canadian brands for Chinese consumers.

Companies like Canada Goose, Roots, Lululemon and Tim Hortons have expanded into China in recent years, leaning into Canada’s reputation as a source of quality goods and often featuring the red maple leaf in store and product branding.

China is central to the growth strategy of many Canadian companies eager to tap into the country’s compelling consumer market.

But retail analyst Bruce Winder says a diplomatic spat between Ottawa and Beijing could spur a “soft boycott” of Canadian brands in China.

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He says a pullback in spending on Canada-based brands in China could jeopardize the expansion plans of several companies.

Click to play video: 'International business professor ‘sure’ there will be ‘some retaliation’ after Canada ousts Chinese diplomat'
International business professor ‘sure’ there will be ‘some retaliation’ after Canada ousts Chinese diplomat

Tims China chairman Peter Yu said in February that the coffee and doughnut chain had 600 locations in China, with plans to grow to a thousand by the end of 2023.

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Lululemon had 117 stores in China as of the end of January, according to the company’s most recent annual report.

Roots has more than 100 partner-operated stores in Asia, the retailer said in its annual report in January.

Canada Goose appointed Larry Li as president of its China operations last year, part of what it called a new phase of expansion in China.

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