H & M wary of entering Indian Market

Presented By Amit Kumar (2k11b48) Tapas Nandy (2k11b39)

United States based GAP Inc. • The design team in the company’s Sweden office controls the steps of production.300 stores in 43 countries • It is ranked the second largest global clothing retailer • It leads over third largest global clothing retailer.  These facilities are used for horizontal division of labour rather than being integrated .Introduction • H & M Hennes & Mauritz AB is a Swedish retail-clothing company. and production is mainly outsourced to approximately 800 factories in Europe and Asia. known for its fast-fashion clothing • It has over 2.

half of it to European suppliers • H&M had been quicker to internationalize. generating more than half its sales outside • Unlike Inditex. H&M marketed its clothes under numerous labels or concepts to different customer segments • H&M also tended to have slightly lower prices than Zara • It refurbished its stores less frequently than Zara .Difference between H & M and Inditex • H&M outsourced all its production.

• H&M's closest rival globally and Spanish fashion behemoth Zara made an aggressive entry into India • FDI was then barred in multi-brand and general merchandise retail and it was restricted to 51% in singlebrand retail • H&M's concerns will include Zara's aggressive JIT .Indian Market Perspective • Back in 2010 H&M had meetings with mall developers like Phoenix and DLF • They also hold talks with ITC Group and Mukesh Ambani's Reliance.

. chairman of retail planning consultancy Asipac. it will not be defined an SME.Current Indian Market Scenario • India relaxed laws allowing foreign retailers to wholly own their businesses with a rider • Another Swedish giant IKEA non-committal of entering India----SME sourcing being the primary reason "If a supplier can meet the sort of volumes required by a global retailer the size of H&M." -Amit Bagaria. • The government has introduced the local sourcing norm to expand domestic manufacturing.

100-crore Gokaldas Exports. already sources finished goods from the around Rs 2.  H&M. for instance. .Primary concerns for H & M • It is not a tall order for multi-billion dollar global retailers to source as much as 30% of their India sales from domestic manufacturers. and Mango. Esprit and Spanish brands Zara.200crore Bombay Rayon and Rs 1. • It's the size of manufacturers they are now expected to work with that has caught foreign retailers in a bind • SMEs are defined as those whose initial investment in plant and machinery is between Rs 25 lakh and Rs 5 crore • Anonymity regarding uniform quality standards • Tough competition from international fashion brands in India such as Tommy Hilfiger.

Economic & Cultural scenario • Economic uncertainty in a number of markets has had a negative effect • Western women's wear market in India is still not as big Unlike Chinese women. Indian women are still in the process of switching from ethnic to western women's wear India has only 4 ZARA outlets all over India compared to 9 outlets of ZARA in Beijing itself !!!!! .

Third Eyesight . • India's growing economy.The Brighter Side • It could source high-fashion products or those that require hand embroidery from SMEs in small volumes and sell it at a premium in its international flagship stores • Economic effect in long run • Presence of Inditex's Zara and American competitor in India. is the biggest draw for foreign retailers • Nearly 20 foreign fashion brands have being launched annually since 2005 . when compared to Europe and North America.

com/article/2012/01/26/hmresults-idUSL5E8CQ0I020120126 • http://www.hm.in/news/apparel/hm-stillmulling-over-india-foray-281120112804 • http://articles.indiatimes.fashionunited.economictimes.in/news/apparel/hmcautious-about-india-entry-060220123115 • http://www.• http://www.com/201201-30/news/31005922_1_sme-sourcing-foreignretailers-raghav-gupta • http://www.com/us/ .fashionunited.reuters.

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