German sportswear company Adidas and its U.S. rival Nike saw a plunge in their online sales in China from an ongoing public boycott of their products for taking a stand against Xinjiang cotton, after an international organization had alleged "forced labor" was involved in its production. 

Last year, the Better Cotton Initiative (BCI) issued statements saying research findings corroborated its own research that there were increasing risks of "forced labor" in northwest China's Xinjiang Uygur Autonomous Region. 

Members of the BCI, Adidas and Nike along with many other brands, faced a backlash in China after deciding to suspend sourcing cotton from the region.  

As the incident fermented, BCI's China office however said no "forced labor" found in Xinjiang and the organization also removed statement on Xinjiang cotton from its website.

In April, sales in Adidas and Nike's Tmall stores slumped by 78 percent and 59 percent respectively, according to American financial services firm Morningstar. Tmall is China's largest business-to-consumer e-commerce platform, backed by Alibaba Group. 

"Based on our checks with sportswear companies as well as their distributors, contribution from the platform alone accounts for more than 10 percent of revenue in the country," said Catherine Lim and Eric Zhu, consumer analysts at Bloomberg Intelligence.

The platform is a leading indicator to what is selling well, they added.

During the boycott, many Chinese consumers turned their back to those international brands while embracing Chinese firms such as China Lining, Li Ning's premium fashion arm.

China Lining's sales on Tmall jumped by more than 800 percent in April, Morningstar said.

Adidas on Wednesday raised its outlook, expecting its sales to grow at a high-teens rate in 2021, compared to the mid- to high-teens rate growth forecast in March, with a jump of around 50 percent expected in the second quarter.

It said the acceleration would be driven by new products, as well as big events like the European soccer championship, the Copa America and the Tokyo Olympics.