Done by:
Carole Flamion
Wee Beng, Seow
COVERAGE OF
PRESENTATION
 H&M Story and Overview
 Fast Fashion Market
 H&M Main Business Activites
 H&M Business Model
 H&M market segments and targets
 Competitor Analysis
 SWOT Analysis
 Challenges faced by H&M
 H&M Marketing Strategies
 H&M Future Development
H&M STORY
• 1947: First Store opens in Västerås, Sweden, selling women clothing. Store is called Hennes.
• 1952: Hennes open in Stockholm
1947- • 1968: Sales of men’s and children’s clothing begin. Name is changed to Hennes & Mauritz
1980s • 1974: H&M is listed on Stockholm Stock Exchange
• 1976: First store outside Scandinavia opens in London, in the UK
• 1977: Impuls stores, focused on teenagers, are launched. Sales of cosmetics begin
• 1980s: Stores open in Germany and the Netherlands
• 1998: First store open in France. H&M online shopping begins
1990s • 2000: First US and Spain stores were open. Continual expansion in the European market
-2006 • 2004: Initiates designer collaborations starting with Karl Lagerfield and followed by Madonna, David
Beckham
• 2006: First stores in the Middle East open via franchise
• 2007: First Asian stores open in Hong Kong and Shanghai. New Concept store COS is launched
2007- • 2008: First Japan store is opened and H&M acquired fashion firm FaBric Scandinavien AB, which
comprises the brands Weekday, Monki and Cheap Monday
2013
• 2009: Beijing got its first H&M store. Russia also got its first H&M store.
• 2010: First store in Korea and Turkey. Monki moves into Hong Kong
• 2011: H&M opens in Romania, Croatia and Singapore
• 2013: Continual expansion in Chile, Estonia and Indonesia. Other brands under H&M group also open
in new markets
H&M IN CHINA
 First H&M store opens in China, Shanghai in 2007
 Currently, 170 stores in China-wide
 4 COS stores
 5 Monki stores
FAST FASHION
 Collections based on the most recent fashion trends presented at
Fashion Week
 Designed and manafactured quickly & cheaply
 ZARA, H&M, Peacocks and Topman leading retailer in fast fashion
collections
 Deliver designer products to a mass market at a relatively low prices
 Category Management
 Quick Response Method
 Supply chain
FAST FASHION MARKET KEY FIGURES
FAST FASHION
MARKET IN CHINA
 Metersbonwe, La Chapelle and online retailer Vancl emerged as local
fast fashion contenders
 Building strong footholds in smaller, relatively untested third and
fourth tier cities
 Competitive pricing
 Comparatively easy access to suppliers and distribution networks.
OPPORTUNITIES AND
POTENTIALS
 H&M plans to increase presence in lower tier cities by 2015
 Even in the face of an expected economic slowdown, growth of China’s apparel
industry is likely to outpace the nation projected GDP
 Highest rate of expansion to take place in China
 Landlords of shopping centres aggressively pursue leasing deals with international
brands such as H&M
 Online shopping expansion
 Attract next-generation consumers
KEY S TO LAUNCHING
NEW BRANDS
 Finding new customer segments that have synergy with an existing
brand such as COS and Monki
 Determining the right positioning in those segments, including
product characteristics that are differentiated from the mass market
and that target customers will welcome
 Assembling an experienced, knowledgeable management team
H&M ADVANTAGES
 Active use of celebrity endorsements
 Mass media marketing
 Presence in China social media, Sina Weibo and Youku channels
 APPs on smartphones
 Association with the younger generation consumers
 Large and diverse team of designers and management team to ensure
fashion, quality and sustainability in its products
H&M MAIN BUSINESS
ACTIVITIES
 H&M offer collections that are wide-ranging and varied for
women, men, teenagers and children
 Offer inspiring fashion with unbeatable value for money
 Aim is to always exceed customers' expectations on quality
 Ensure the best price by
-
in-house design
No middlemen
Large purchasing volume
Buying the right products from the
right markets
- Efficient logistics
- Cost-consciousness in all parts of
organization
H&M’S BUSINESS MODEL
 Outsource the production process
 H&M buy clothes and other items through an abundance of detached suppliers
 Its purchasing depends on what sells well and what the market situation looks
like.
 H&M has established an efficient distribution channel
 It makes good use of its supply chain and information channel
 A unique business model that permits H&M to have such good sales
performance
FINDING THE PERFECT FIT
 Women, men, teenagers and children’s markets
 Main targets:
•
•
•
•
20-30 years old
Urban, middle class with increasing incomes
Fashionable people who wish to keep up with the fashion from the Fashion Week
Taste for Western goods
 H&M fashion year is segmented into 2 sections mainly:
• Spring/Summer
• Fall/Winter
 Through its promotional videos on social media like Youku, H&M portrays a
young and hip culture to its fashion line
INTERNATIONAL
COMPETITORS
 Main competitor: ZARA (Spain).
 Upcoming competitors in the industry:
• Uniqlo (Japan)
• Forever 21 (US)
• Topshop (UK)
DOMESTIC COMPETITORS
Following international trends
 Metersbonwe, sub brand: ME&CITY
 URBANEIGHTDAY
 VANCL (Online)
MOST VALUABLE APPAREL
BRANDS IN CHINA, 2012
SWOT ANALYSIS
 STRENGTHS
- Providing quality fashion at best price through strong procurement and designing strategy
- Wide geographical market presence (3000 stores in 53 cities)
- Collaboration with designers
 WEAKNESSES
- Product recall
- Knowledge of the Chinese market
 OPPORTUNITIES
- Business expansion in new and existing markets
- H&M Home initiative
- E-commerce markets i.e Online shopping
 THREATS
- Intense competition
- Declining consumer confidence
H&M OBSTACLES
 Fashion has a limited shelf life even more so for fast fashion
 External factors in production countries
 Labour rights and environmental issues
 Balancing low price strategy with Fast Fashion strategy
 Balance long lead time of outsourcing with agility fashion business
 Threat of substitutes
 Bargining Power of buyers
H&M’S MARKETING
STRATEGIES
 Collaboration with exclusive collections with top designers such as
Karl Lagerfeld, Victor&Rolf, Stella McCartney and Roberto Cavalli,
Versace
 H&M associate itself with internationally famous celebrities to
create more awareness for its brand
• Gisele Bundchen, face of A/W 2013 collection
 In Europe: H&M design award, « Moving fashion forward »
RECOMMENDATIONS
 Expand into lower tier cities
 Increase social media presence in China such as WeChat
 Promote environmentally friendly production process
 Engage local celebrities to be involved in H&M advertisements
 Create an online shopping portal for the Chinese market
THANK YOU FOR YOUR
ATTENTION!