Swedish fashion retailer Hennes & Mauritz is moving fast in the country. With rapid store openings and competitive pricing, the company has registered a turnover of INR 955 crore for the year ended November 2017. The turnover is 94.5% higher from the previous year. The company added more stores in the country taking the count from 15 to 27.
The rapid growth has come on the back of the company entering smaller markets like Indore, Coimbatore and Raipur where H&M plans to cash in on aspiring middle-income households. It also added new stores in Mumbai and Delhi where it is present since 2015. Most foreign retailers have kept away from a number of cities where H&M is aggressively launching. This has helped H&M gain a $70 billion fashion market. They are entering all cities which allow them to capture quality real estate in the market.
H&M now wants to move beyond the brick and mortar by cashing in on India’s growing online fashion market. The brand will be launching an e-store later in 2018 in the country, in line with the global mandate to grow online sales as the in store sales slump. It has seen a strong online business in select markets globally, but in case of physical stores, there are changes noted in consumer behavior and the footfall has reduced with online sales. This has led the company to expand the online presence in more markets including India.
H&M and Zara are fast fashion brands which are in the race to lure India’s young and urban shoppers. H&M entered the country in 2015 and promised to invest more than INR 700 crore to set up about 50 stores in the next five years. The numbers have so far held strong. Zara crossed INR 1000 crore in sales for the financial year 2017, which was seven years after its debut in the country. Zara also opened its ecommerce portal in the country in 2017. The business has been brisk so far but these brands continue to expand beyond the metro cities and will need to ensure higher footfalls in order to boost sales and business. This is because affluent shoppers in India are restricted to urban pockets and the lack of quality malls is a big challenge in smaller cities.
The brands will have to ensure higher returns to mall developers in the future or else it will pose a challenge for them if the developers are not able to see sustainable business.
Nevertheless, H&M is confident that its apparel and the wide offering in terms of variety will help it win in India. The brand offers quality fashion at the right price and has a diverse collection where everyone can find their own style.