A year into Ukraine war, Asia’s big brands sit out Russia boycott

Fewer than 100 Asia-based firms have suspended or scaled back their Russia operations, according to database.

Many of Asia's biggest brands, including China's Alibaba, have continued doing business as normal in Russia [File: Thomas Peter/Reuters]

Kuala Lumpur, Malaysia – In the weeks following Russia’s invasion of Ukraine on February 24, 2022, the corporate world’s response revealed an East-West divide.

As North American and European firms rushed to cut ties with Russia, Asian companies largely sat out campaigns to isolate and punish Moscow that went beyond their legal obligations under sanctions.

That picture is largely unchanged as the biggest war in Europe since World War II enters its second year.

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Out of the more than 1,100 companies that announced plans to withdraw from Russia or scale back or suspend operations in the country — including such household names as McDonald’s, Coca-Cola, Starbucks, Apple and Nike — fewer than 100 are from Asia, according to data from the Chief Executive Leadership Institute (CELI) at the Yale School of Management.

Japan alone accounts for more than half of the Asian companies that have reduced exposure to Russia, with only a handful of firms in major economies such as China, India and South Korea paring back ties.

The East-West divide in the business world points to differing perceptions about the relevance of the conflict to their region, according to analysts.

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“Russia is in many ways more distant for Asia and Asians. When Russia is mentioned and on the agenda in Asia, it is mostly about energy and trade issues rather than deep Cold War issues and collective societal memories,” Martin Roll, a branding consultant based in Singapore and the author of Asian Brand Strategy, told Al Jazeera.

“Therefore, the war in Ukraine is more distant to Asia on an aggregate level. It does not mean that Asia and Asians do not see it or do not care, the war is just far away. There are many conflicts in the world, and the war in Ukraine is one of them, though one at unprecedented scale.”

Hundreds of iconic Western brands, such as McDonald’s, have pulled out of Russia in response to its war in Ukraine [File: Anton Vaganov/Reuters]
To a large extent, the responses of corporations have mirrored the positions of the governments where they are based.

Japan, a close ally of the United States which also is involved in a number of territorial disputes with Russia, has taken by far the toughest line against Moscow in the region, rolling out multiple rounds of sanctions against Russian officials and entities.

Globally renowned brands such as Toyota, Sony, Nissan and Nintendo are among the 50 Japanese firms that have exited Russia or scaled back operations.

In China and India, which have declined to condemn Russia or impose sanctions while also ramping up Russian energy imports, many of the biggest brands, including Indian carmaker Bajaj Auto and Chinese tech giants Alibaba and Didi, have continued business as usual.

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In total, just 12 Chinese and Indian companies, including the Bank of China and Tata Steel, have scaled back ties, according to CELI data.

In South Korea, a US ally that has tried to stake out a more nuanced position on Russia compared with neighbouring Japan, five firms have announced the suspension of their Russia operations, including flagship conglomerates Samsung and Hyundai.

Singapore, Malaysia and Vietnam, which have traditionally sought to balance their ties between East and West, have between them just five companies that have publicly sought to distance themselves from Russia.

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Japanese firms, including auto giant Toyota, make up more than half of the Asian brands that have suspended or scaled operations in Russia since the invasion of Ukraine [File: Eric Gaillard/Reuters]
Marcus Osborne, the founder and chief executive of Fusionbrand, a branding consultant in Kuala Lumpur, Malaysia, said the region’s ambivalence towards the conflict reflects a longstanding aversion to getting involved in conflicts overseas.

“I think it’s essentially cultural — a reluctance to get involved in other country’s affairs — especially when it is so far away in geographical, ideological and other terms. And they may be thinking if we get involved, what happens if there is a conflict in our region, does it mean they can get involved here?” Osborne told Al Jazeera.

Sumati Varma and Rajeev Upadhayay, professors of commerce at the University of Delhi, said that the region has been more focused on economic recovery and cost-of-living pressures after the pandemic than the situation in Ukraine.

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“As the post-pandemic global environment led to the worst economic depression in decades, responses of countries have attempted to combine domestic issues of survival with social and ethical concerns,” Varma and Upadhayay told Al Jazeera in a joint written interview.

“The current conflict has exacerbated the global crisis as prices of food, oil and fertilisers have skyrocketed across the world, complicating domestic issues for many Asian countries.”

While companies in the West came under serious pressure to shun Russia, brands in Asia may find navigating which causes to support trickier in countries where public sentiment is less clear-cut or uniform.

Asian brands did not face the same pressures, Roll said, which encouraged firms to adopt a wait-and-see attitude instead of swiftly adopting a firm public stance.

“A company that has spent years building up a great brand and image can risk losing that position in a split second,” Roll said.

“There may also be concerns about whether to get involved in issues not related to issues closer to the Asian agenda. Asian cultures may be inclined to get less involved in the affairs of others. It is deemed respectful and good courtesy not to impose on what others should do.”

Source: Al Jazeera

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