Swedish fashion retailer Hennes & Mauritz (H&M) opened its fourth store in India, and the first in Bengaluru, on Friday. Janne Einola, country manager, H&M India, tells Mahesh Kulkarni how the company plans to expand its footprint in India.
Your competitors Zara and GAP are already in India. Why did you take so long to enter the Indian market?
We don’t look at what our competitors are doing because that’s not the right way to do business. We see ourselves as the biggest competitor and our objective is to surprise our customers. We are trying to be better everyday. It is better to focus on what you believe and do better than it everyday. It is the right time. We were also waiting for opening up of 100% FDI in single brand retail. We are operating in 61 markets worldwide and this year we will be entering three new markets. India is our 60th market.
How does H&M look at India as a market? What is the potential for growth here?
We have a great potential for growth in India. It is the second biggest market in the world. The government of India is doing a lot of things on retail policies. This all means that we can grow a lot in India.
How many stores are you planning to open in India in the next five years?
We do not have any number on our mind. We indicated to the government in our FDI application that we will open 50 stores and invest R720 crore. But that is not all. I believe we will have much more. We now have three stores in Delhi and Gurgaon. Our fourth store is now open in Bengaluru. In 2016, we will open four more. Our next stores will be in Noida, Mohali and Mumbai. We are also looking at cities like Jaipur, Hyderabad, Chennai and Kolkata. There’ll be more stores in Bengaluru too.
Will H&M be present only at malls?
No, we have started with malls. We want to go to high streets for some standalone stores as well. We are studying that option.
Why do you think you have a big market in India, which is a price- conscious market?
Our prices are definitely competitive. We have started selling goods at R399 for kids. Our denim collection for women is priced at R799 and R999 for men and the range goes up to R14,999. We are happy that our customers have given good feedback.
What is your investment per store? How much will you invest?
That is something we can’t disclose. It depends on each city. We have taken approval for an investment of R720 crore for 50 stores. It will be bad business if we open only 50 stores in India.
What is the local sourcing plan?
How much of what you source here is sold in your stores?
We have been sourcing products from India for the last 30 years for our global operations. We’ll increase our sourcing from local vendors and also sell them in our stores here. Within the next five years, we will meet the FDI requirement of 30% local sourcing. The products sourced in India are sold across all our stores globally. We can’t disclose the value.
Will you also sell online in India?
Not at this point in time. Our focus is mainly on ‘Brick and Mortar’ format.