H&M India charts stable growth path as profit rise
In this article (5)
H&M India reportedly surpassed Rs 1100 crores (US$157.6 million) in sales in the 12 months to November, just three years after the Swedish fast-fashion label entered the market.
There are now 42 H&M India stores trading and consumer demand continues to meet the pace of expansion. That means that the Indian business has not been swamped with unsold inventories requiring aggressive discounting strategies, in contrast to most other international markets in which H&M trades.
“H&M India’s expansion strategy has been successful and the company has been expanding in the right way,” observed Shubhangi Bidwe of Fashion United.
“A tight control on expenditure, including ad spend, economies of scale, well-managed back-end, lower product prices and penetration in tier 2 and tier 3 cities have helped the brand grow faster in India compared to most of its peers.”
Given the footfall H&M stores attract, the brand is coveted among shopping centre managers in India who typically place them in anchor spaces.
The company plans to continue to open new stores at the rate of about one per month. Online, the brand is registering double-digit sales growth.
Questions & Answers
Q.What is the primary reason H&M India has avoided large unsold inventories?
What is the primary reason H&M India has avoided large unsold inventories?
Consumer demand has consistently kept pace with the rate of H&M India's expansion. This balance has prevented the accumulation of excess stock, unlike in many of H&M's other international markets.
Q.Which specific strategies contributed to H&M India's rapid growth?
Which specific strategies contributed to H&M India's rapid growth?
Key strategies included tight control on expenditure, economies of scale, well-managed back-end operations, and lower product prices. Penetration into tier 2 and tier 3 cities also aided faster growth.
Q.How do shopping centre managers in India view H&M stores?
How do shopping centre managers in India view H&M stores?
Shopping centre managers highly covet H&M stores due to the significant footfall they attract. They typically aim to place H&M outlets in prominent anchor spaces within their centres.
Q.What are H&M India's future plans for physical store expansion?
What are H&M India's future plans for physical store expansion?
H&M India intends to maintain a consistent expansion rate for its physical stores. The company plans to open new locations at a pace of approximately one store per month.
Reader pulse
What's H&M India's biggest strength?
24,484 votes so far