Embracing change, H&M presses ‘accelerator button’ for upgrading in China

As an international fashion brand with long-term roots in China, H&M Group has the support of global innovation resources, combined with in-depth insight into the Chinese market and localised innovation, to better meet local consumer demand.

On 9th May, H&M Shanghai flagship shop on Nanjing East Road opened its doors to a new look, with leaders from Shanghai Huangpu District Government, Saed El-Achkar, President of H&M Retail Greater China, and a number of partners gathering at the site.

The opening of H&M's flagship shop on Nanjing East Road marks an important milestone in the upgrading of H&M's shops in the Chinese market, and H&M looks forward to bringing consumers more trendy, high-quality and cost-effective fashion products, as well as a more comfortable and well-loved fashion consumption environment.

It is worth noting that the shop renewal is only one of the actions of H&M to respond to the changing needs of consumers. In order to further meet the needs of Chinese consumers, the end of 2022, the creation of the China Design Centre to more closely match the preferences of local consumers; consumer demand as the focus, strengthen the quality, and continue to iterate and upgrade the choice of fabrics, technology and design; continue to enhance the stickiness of the membership, and the integration of online and offline channels, to provide consumers with an omni-channel shopping experience ...... These are the unique features of H&M in doing a good job of localising the layout of products and services.

Long-term persistent investment has also enabled H&M to reap the corresponding returns. As can be seen from its latest report on its first quarter results for fiscal year 2024, H&M's global profit rose 7 per cent year-on-year. According to the source, the growth trend in Greater China is good. At the same time, H&M said it will continue to increase investment in the Chinese market business, is committed to focus on fashion, product, customer experience and brand impact of the full range of breakthroughs and innovation. This shows that the Chinese market is still a crucial part of H&M's business layout.

Returning to ‘fashion DNA’ with product as the core of development

Nowadays, new and old things are constantly changing, the public's lifestyle continues to evolve, followed by the evolution of the business pattern and the consumer's fashion degree of differentiation and leap, which also accelerated China's fashion industry market pattern reshaping, H&M brand renewal and upgrading is imperative.

Since 1947, H&M has played an important role in the transformation of the fashion industry, making fashion a consumer product for the masses. More importantly, H&M has made fashion no longer the privilege of a few through constant product innovation and convenient shopping experience, allowing everyone to enter this world of change.

In recent years, rational consumption has become the main tone, ‘reverse consumption’ of young people are pursuing the ultimate quality-price ratio experience. Such a trend may be the same as the business philosophy that H&M has always insisted on.

In H&M's view, the price and fashionable products are designed to bring consumers the best experience. "We want to give back to our customers by continuing to improve our outstanding value. We choose to maintain favourable prices because it is H&M's goal to ‘make fashion accessible to all’." H&M said, ‘We will also continue to offer a diverse range of fashion products in the future - category diversity and fashionability are the core strengths of the H&M brand. In order to achieve our ambitious goals, we not only need to reach more customer groups, but also need to fully mobilise the purchasing power of different customer groups."

At the same time, as an important part of the renewal and upgrade, physical shops can not only show the brand image and convey the brand value, but also have a pivotal significance in the current differentiated competition. The grand opening of H&M's flagship shop on Nanjing East Road in Shanghai further demonstrates H&M's determination to plough into the Chinese market, improve product offerings and upgrade the excellent shopping experience for Chinese consumers.

For H&M, localised products have become an important path to integrate into the Chinese market. Whether it's design that better reflects Chinese culture or close cooperation with Chinese artists, H&M has shown its own way of thinking and solutions.

In order to design localised products that are more in line with Chinese consumers' preferences and wearing styles, H&M established a China Design Centre in 2022. With the strong productivity of H&M's Chinese production partners and the customised designs of the Design Centre, consumers can enjoy local fashion products that better reflect the collision of cutting-edge fashion and Chinese trends, such as the H&M China Spring Festival collection launched by H&M and Chinese artist Yang Wan, which will make its debut at the Expo in 2023. For example, H&M's Chinese New Year collection with Chinese artist Yang Wan, which debuted at Expo 2023, is a successful attempt at local design and has been well received by consumers.

The collaboration with Shanghai Fashion Week is also an important step for H&M to meet the localised needs of Chinese consumers. As the best communication platform for the development and promotion of Chinese original design, Shanghai Fashion Week has attracted many outstanding designers and brands from home and abroad over the years, and is also an important stage for Chinese designers to show their talents to the international community, H&M will next cooperate with Shanghai Fashion Week to launch a new collection of Chinese designers in 2024, aiming at presenting the cutting-edge glamour of local fashion design. Both parties will integrate cutting-edge design and creativity, diversified business channels and other fashion industry resources to call for more attention and support for China's contemporary fashion power. By joining forces with major fashion forces, including Shanghai Fashion Week, H&M is committed to supporting creative Chinese design talent and a thriving fashion industry.

Understanding the local consumer market, playing online and offline synergistic development ‘combo’

Emphasis on local development and innovation has coincidentally become an important part of the development of foreign-funded enterprises in China.

H&M has always regarded China as a key market, since entering the Chinese market in 2007, has been to meet the diversified fashion needs of Chinese consumers as a top priority. In the face of changing market conditions and consumer demand, H&M has launched an omni-channel strategy in the process of localisation strategy, integrating online and offline channels, and playing the ‘combination punch’ of online and offline synergistic development.

In the past two years, H&M has taken the lead in upgrading its landmark shops, giving new life and definition to its offline sales channels. By assessing the development needs of different cities, H&M is actively exploring the appropriate direction of shop development, embarking on shop refurbishment and shop space planning to ensure the best shopping experience for consumers.

In the first quarter of this year, H&M has refreshed and upgraded three shops in three cities in China, located in Chengdu Hopscotch, Shaoxing Yintai City, and H&M Beijing Yuehui Plaza. In H&M's view, shops are an important link for consumers to touch the brand and feel the brand culture.

In the development of digitalisation, H&M follows the trend and further improves the construction of omni-channel. In addition to its official website, WeChat app, and Tmall flagship shop, H&M continues to expand its e-commerce platform to provide consumers with a seamless omni-channel shopping experience. 2023 September H&M and Jingdong joined hands to open the H&M Jingdong official flagship shop, bringing a wide range of inspirational and cost-effective fashion apparel to consumers, unlocking the latest fashion trends and multiple wearable inspiration. The latest fashion trends and multiple wearing inspiration are unlocked for consumers. It is certain that the development of digitalisation has brought H&M a double growth in volume and sales.

In addition, H&M also actively builds and improves its membership system. It is reported that H&M China's omni-channel membership has exceeded 30 million members, who can not only participate in points exchange and enjoy special offers, but also participate in occasional marketing promotional activities organised by the brand. For example, H&M Move recently invited H&M members to participate in the brand's music and fitness community to create an experience course, which attracted a lot of attention. H&M also invited members to participate in the annual designers' collection of members of the priority purchase, visit the Rokh H&M flash space, as well as participate in the H&M flagship shop on East Nanjing Road, such as the VIP night and other activities, so as to enable members and the brand to establish in-depth links.

By actively strengthening digitalisation, multi-channel and multi-format layout, paying attention to and following the local business environment and local consumer behavioural trends, the company's performance has demonstrated solid resilience.

With an eye on the future, H&M will continue to leverage the power of Chinese consumers, creative fashion talents, supply chain, industry partners and other stakeholders to inject innovative and dynamic fashion stories into the industry. We will continue to provide consumers with fashionable products and experiences to achieve a higher level of brand development.

As mentioned by Mr Sze Yee Teck, President of H&M Group Retail Greater China, H&M has regarded China as a very important market from the very beginning.