India is a promising market for exports: H&M’s Helmersson
H&M Group recently announced a $177 million cost-saving drive amid weak consumer sentiment globally. So are you out of the woods yet?
No, this is an extreme situation. I don’t think anyone has experienced this before. The pandemic’s consequences are not over yet. And then there are also geopolitical challenges and the consequences of the war in Ukraine. Everything is hitting right now regarding customer sentiments or price increases. People simply don’t have as much money as before. Energy prices are going up. It’s a challenging time, but it comes with great opportunities for us, like strengthening our position further and also thinking of our core business. Usually, when people get less money, they can turn to us with the best combination of price, fashion, quality and sustainability. So, we’re working really hard with the customer offer and the customer experience.
So, where does India stand? Will you plough more investments in India?
We believe a lot in India. I would say that it’s one of our priority markets. It has great potential, looking at the different customer segments, opportunities in digital channels and physical stores, and the amazing bounce-back that you did after the pandemic. Also, the culture here is very aligned with expressing yourself through fashion. It’s very vibrant and colourful. On top of that, we have production here. So, we have a little over 65 suppliers in the country with great potential. We have a lot of talent coming from India, of course, in our organization here, but also back in the head office and in other parts of the world.
When you say priority market, what does it mean on the ground?
We’re looking into how we can grow in different ways in India, so profitable growth, but also doing it in a good way. For example, one new concept that we launched—H&M Home—and having the ability to also produce these products in India. That’s a very exciting way to grow and attract new customers because home is quite different from fashion. So, I think launching new concepts will be one way but also by just expanding both the digital channels and the store network and looking into how this can be combined to make an even smoother customer experience.
How many more H&M stores will you open in India?
We don’t have a number; we work on it continuously. Right now, we have 48 stores in 26 cities. So, obviously, we have an opportunity to grow. In the past few years, especially during the pandemic but also after, many companies reduced their pace of growth. Now, we are as excited as many others to keep on our different growth journeys. So, I don’t have a number to give as to how big India could be—we just see that it’s one of the most promising markets.
Has demand in India rebounded?
After the pandemic, India was one of the markets where we saw the clearest kind of bounce-back. We have physical stores and our own online channel, and we have a digital channel through Myntra. We saw a very good bounce-back, especially in physical stores.
Post-covid, are you looking at broadening your supplier base in India?
Yeah, we are broadening. This is continuous work. We’re looking into especially more near-shore markets. We have stores in Asia, so it’s a near market for many countries, but we’re also expanding for Europe, and also we’re looking into opportunities in South America.
Where does India fit in?
India is a very promising market (for exports) both because you can, of course, do near-shore for big markets for us in Southeast Asia, say Vietnam, Malaysia and the Philippines. But also, of course, we are supplying globally from India. There are quite a lot of things happening, say with the different product types that you can make from India.
We also have a clear climate agenda, so when a country also explicitly says they are going to shift to renewable, it becomes more interesting for us. There seem to be a lot of these initiatives in India, which is a benefit for us.
Fast fashion has been criticized for its adverse impact on the environment. What is H&M doing to make fashion more sustainable?
Fast fashion, many a time, comes with a negative cling to it. And this we have worked with for years. How we deal with it is through circularity—one is to make sure that the products you make are made of sustainable materials. Also, in the processing, when you, for example, make fabric, you use renewable energy because that’s also circular. If you use recycled materials, you don’t have to cultivate cotton over and over again; you can reuse fibres which helps you decouple growth from using natural resources. The other area is circular business models. And what’s looking most promising right now is the re-sale part. Once you’ve made a garment, of course, it’s better the longer it can live.
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