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H&M: Fastest fashion first

Here’s a fun bit of trivia. Swedish clothing retailer Hennes & Mauritz was founded in 1947. The year India was freed of its colonial shackles. In a slightly curious move, last year the fashion retailer chose Independence Day week to open what has become one its most successful stores, in Mumbai’s busiest and swankiest retail address, Phoenix Mills. H&M installed canopies and large fans in the square across the over 30,000 sq ft store, so its young customers wouldn’t faint under the hot sun. The first in the serpentine lines waited almost 30 hours. It’s the kind of human devotion typically reserved for Harry Potter and the iPhone.

As a reward, the shopper received a gift card worth `10,000 while the next two in line received gift cards worth `7,000 and `5,000. #HMlovesMumbai trended on Twitter last year and generated close to 25,000 tweets. By the end of 2017, H&M which entered India in 2015, plans to open its 30th store in the country, beating Zara, which has 20 plus stores. The former’s newest store opened this month in Raipur, Chhattisgarh. H&M has expanded quickly, opening 16 stores in 18 months in metros and Tier 1 markets, and threatens the foothold its global rival, the Spanish Zara has painstakingly acquired since 2010. H&M’s entry even prompted its more expensive competitor to slash prices.

The Swedish brand hit another significant milestone when it crossed `700 crore in sales during a nine month period ending August 2017. Heavy discounts, an extensive low- price basic collection, and new stores contributed significantly to the growth spurt in sales. The country’s biggest international apparel brand, Zara’s sales stood at `1,023 crore during FY16-17.

Other global brands like the American Levi Strauss and United Colors of Benetton, as old as two decades in the country with stores in the many hundreds, and the UK’s Marks & Spencer, which has been around for a decade and appeals to a slightly older consumer, had sales of `700-800 crore, according to reports. Street-wise Fashion Janne Einola, of course, is thrilled to bits about H&M’s progress; “It’s a fantastic result. But it was in our plan.” More importantly, he tells us, “Our profit is increasing more than our sales. Retail is not only about sales and top line.

It’s your bottom line and profit.” Einola, who’s in his 30s, has been with the Stockholm-based retailer since he was 19. He’s had “the typical H&M career” going from store and area manager to expanding and managing operations in markets like Finland, the Baltics, Hungary, Poland, Slovakia and now India. We ask him if his customer here is any different from those in his European mandates. “Fashion is global” he answers. “The only difference I see is that Indians love colours and prints.” The question prompts Einola to clear the air on another vexing matter. The issue of what Indians get served vis-a-vis their counterparts in Western markets: “We sell the same collection here that we sell globally, in New York, Paris, Milan or Singapore,” he says. And then adds a rider, “But different markets are selling products at different speeds. A collection may have arrived later in India.” Although the world’s second largest fashion retailer entered the market five years after Zara, it has managed to clock impressive growth.

“Of course we looked at competitors and Zara is one of them. But there are also strong local players. The aggressive growth we have here is only because of the market and demand. There’s a great demand for what we have to offer - great fashion and quality at the best price done in a sustainable manner. Traditional clothes will always be there. But the demand for western clothes is growing. You can see it on the streets. We want to respond to that de- mand.” An approach reflected in its mainly social media and influencer-led marketing programs.

For #HMIndiaStyle and #HMlovesMumbai the brand worked with key influencers from different walks of life and asked users to share pictures of their per- sonal fashion style. Two’s Company... The two horse race, however, is about to get crowded. While H&M snaps at Zara’s heels, the expected entry of Japanese giant Uniqlo and its low-priced, basic, durable and fuss-free brand of fashion is already heating things up. There may even be a bit of good old fashioned revenge in the works: a few years ago, Uniqlo’s revenues and dominance in its home market took a hit, in part due to growth-hungry foreign players, namely Zara and H&M.

At the time, Tadashi Yanai, founder of Fast Retailing, Uniqlo’s owner, decided to go back to its roots and strengthened the brand’s popular basic designs. At the time he said “We were driven by ‘surface fashion’ too much... a meaningless design such as a shirt with a frill attached in a meaningless part.” There’s nothing meaningless about Uniqlo’s designs though. Major malls across India are rolling out the red carpet for the world’s third largest retailer, which began as a tailor shop. Some go as far as saying if they don’t have the real estate, they’re just going to have to create it. Which means H&M could have done unto it, as it has done unto Zara.





Source: Et.retail.com,India


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