After waiting for three years to enter India, the $53.16 billion Swedish fast-fashion retailer H&M, has opened its first store at Delhi’s swish Select Citywalk mall on Friday, just ahead of India’s biggest festive season. Janne Einola, chief executive of H&M India, who has been with the retailer since 1997 tells FE’s Sunny Sen in an interview that the company is betting on bring global fashion at low prices as part of its growth strategy in India.
How important is India in H&M’s scheme of things, and how do you plan to expand in the country?
For H&M it is highly respectful to be present in India, now. It is the 60th country for us. It is the right time to be present here. The India market is developing. Western European fashion is growing all the time here — at least in the bigger cities… It is too early to say how many stores we will have. We have opened our first one, here in Saket (Delhi). Then we will have one in Vasant Kunj (Delhi) later this year, and there is one in Bangalore. We are look at all the big cities and at all the prime locations pan-India. During expansion we will not compromise with location.
Brands like Debenhams and Marks and Spencer did not have a good start. H&M has been looking at the India market for three years now. How do you de-risk yourself from failure?
We are looking at all the key markets that we are not present in India, because our target is to grow at 10-15% every year. In 2015, we have opened more than 400 stores. When it comes to the India, our fashion, style and the best price on a sustainable basis is what customer are looking for.
How is the India market different from the US, China an European market?
I don’t know about the US and China market. However, each market is different in terms of what people are looking for, but fashion is global, now.
One concern is that few international brands are getting the global trends into the India market a year later…
We will have the same collection as we have in the rest of the world. That is how we work — we have the same collection in all countries. So what you are seeing here is what you will see in our stores in Paris, New York, where ever you go. It is important to listen to our customer, and adapt the store as per the local demand, but I don’t see that it is required to have any special collection for India.
You have a long sourcing history with India. Does that change?
We have been sourcing from India for the past 30 years. our current sourcing is 80% from Asia and only 20% from the US. We have to increase our current sourcing by 30% to comply with the foreign direct investment (FDI) norms. There is room to increase capacity in India. How much “Made in India” clothes we will have in our stores will vary from time to time, depending on the collection and customer demand. We will not have any special assortment for India.
How do you plan to fight competition from both home-grown and international brands like Zara, etc?
Of course, there is a lot of competition. We have a lot of big competitors like Zara and GAP, and we a have mutual respect for each other. I think our biggest competitor is us — H&M. We have to keep growing the business sustainably, and offer best prices.
Is there a difference in India pricing and global prices, or is there a symmetry across geographies?
This is our India pricing. These are not special prices, or introductory prices.
How does H&M keep its prices so low?
Whatever we do at H&M we do it effectively. We a fantastic design team in Sweden. We have a really effective buying prices. If you do everything yourself you can keep the prices low.
Do you have any e-commerce strategy for India?
Hopefully we will have something in the future, but right now we will focus on retail.