Sourcing norms must be applied for both online and offline channels: H&M Country Manager

India will be the 45th online market for H&M globally. For the past two-and-a-half years, we have been focussing on expanding our physical stores; so going online is a natural step. It will be important for us as it will further strengthen our brand in the metros and make our products accessible in tier II and III cities, where we currently do not have a physical store. Our products will be available online exclusively at our own e-store.

Globally, online sales contribute about 12.5 per cent to the H&M group’s total sales. In India, we believe it will grow very fast, but it will be difficult to give a figure in terms of its contribution to our business in the country. India has great potential, if one just looks at the penetration of smartphones and the demographics of the country, with a large young population that is tech-savvy. The more significant point is that it is important for us to give our customers the choice to buy online or offline. We are investing in building a warehouse in Mumbai, from where we will be delivering pan-India, and we have tied up with a third-party logistics partner.

We are having talks with the authorities regarding this issue. H&M has been sourcing from India for the past 30 years for our global requirement. But the current sourcing norms do not take into account what our global company is sourcing (beyond five years from launch). That is a challenge. I believe it’s unfair. There are several international brands that have an online presence and do not have physical stores, but are not subjected to similar norms. I feel that either the sourcing norms should be applied for both online and offline channels or the government should take into account the global sourcing being done from India. We are a global player with a global supply chain, and our business model is very different from some of the traditional local companies. I think the sourcing norms are the biggest bottleneck for a global fashion retailer. We are interested in bringing some of our other brands, too, to India, but complying with the sourcing norms is a challenge.

Our strategy is to go to the best location in any city, and that will determine how fast we open our new stores and how many stores we open. Last year, we opened 17 stores. This year, too, we hope to open the same number of stores. There is a huge demand for both offline and online channels, and there is space for both the channels to grow.

Right in the beginning, we had said that we want to be a pan-Indian player. Some of the advice I was getting initially was to open stores only in the metros first. But our company’s philosophy is to offer fashion and quality to everyone at the best price in a sustainable way. Consumers in tier II cities are waiting to get access to our global fashion products.

H&M is among the world’s leading fashion retailers and we hope to be the same in India, too. If we continue to grow at the current pace, and with the addition of our online store, we have a great possibility for this. India is one of the focus markets for us, as there is a huge potential in the country — not only in terms of the population, but also in terms of the way the country’s economy is growing and the government’s focus on initiatives for ease-of-doing-business.

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