Taking advantage of the government’s decision to allow full foreign ownership, H&M invests $131 million into India.
One of the first retailers to successfully run sustainable initiatives, Swedish retailer, Hennes & Mauritz (H&M) is known for their trendy fast-fashion collections at low prices. With a total of 2,853 stores in 49 markets around the globe including South Korea and Japan, H&M is adding to their global empire by expanding their stores into India. Having recently been granted the approval by the India’s Foreign Investment Promotion Board, H&M proposed an investment plan of $131 million for 50 locations within the country.
their focus is on supplying the demand for western-lifestyle products and targeting India’s growing middle class
H&M’s new surge into the third largest economy in Asia is due to the Indian government’s liberal economic decision that occurred last year. India now allows full foreign ownership of single-brand retail firms to open into the country, on the condition that 30% of the products will be locally sourced. Arguably a reformer’s initiative, India Commerce Minister Anand Sharma states, “The government remains committed to a liberal economic reforms agenda,” adding that foreign investment was “a source of technology, finance and means of creating gainful employment.”
H&M Chief Executive Karl-Johan Persson affirmed his belief in India’s great potential after meeting with Sharma, revealing their focus is on supplying the demand for western-lifestyle products and targeting India’s growing middle class. Unlike their new market competitors, Levi Strauss and Zara who entered India on joint ventures, H&M has the potential advantage by entering as a fully H&M owned retailer. In addition, H&M has clarified that in compliance to the mandatory 30% local sourcing rule, they have already recognized over 100 Indian supplier factories to which they will be using. Although a schedule of store openings has not yet been released, plans for H&M’s expansion sounds like India’s new fashionable must have.
By CheRima Manayan
