H&M unveils China design hub at CIIE to improve localisation as foreign brands face pressure to meet consumer demands
- H&M launches design hub at the China International Import Expo in Shanghai this week to improve the localisation of its products
- Swedish fast fashion giant faced a boycott in China in 2021 having decided not to buy cotton produced in the Xinjiang Uygur autonomous region since 2020
Swedish fast fashion giant H&M unveiled a China design hub this week amid efforts to improve the localisation of its products, as foreign firms struggle to cater to the changing demands of Chinese consumers.
But at the China International Import Expo in Shanghai on Monday, H&M vowed a continued commitment to the Chinese market by seeking to get closer to its customers as their tastes and needs change.
“Our ambition is … to have a local team located here in Shanghai, close to the market, close to the customers, and close to our supply chain,” said China design hub head Andreas Lowenstam.
Xinjiang defies Western curbs as foreign trade hits record high, surges by 47%
The number of H&M stores across China has plunged to 317 as of the end of last month from nearly 500 in 2019, according to statistics from GeoHey, a Beijing-based geolocation data provider.
H&M products were removed from all major Chinese e-commerce platforms amid the boycott in 2021 after saying it no longer sourced cotton from Xinjiang in response to accusations of forced labour. Beijing has repeatedly denied the accusations.
Besides a nationalism-induced public backlash, H&M is among many foreign firms who are finding growing localisation pressure as the needs of Chinese consumers become more complicated.
Chen Jianqing, who represented US water treatment company BANG.D at the Shanghai expo, said one of the main challenges in China is the mismatch between the key features of the products and what Chinese customers want.
They always need something new, so hams are doing better than wine for me now
“Chinese want different functions in one product and like fancy designs, but what we offer is safe and endurable products with simple designs. It’s difficult to strike a balance on that,” he said.
Jesus Antonio, founder of Xiju, an import and export company registered in Yiwu, Zhejiang province, started selling Spanish ham to China as appetites changed having previously worked in the wine trade for several years.
“They used to think wine is a symbol of status and would be generous to spend on it, but it seems to no longer be the case,” he said. “They always need something new, so hams are doing better than wine for me now.”
For H&M, the pressure to localise also comes as interest in fast fashion cools off as Chinese consumers focus more on quality, abandoning the frivolous collecting of products.
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Global brands face backlash in China for rejecting Xinjiang cotton
Fellow fashion retailers Forever 21 and Zara have also seen a rapid decline in physical stores in China.
H&M, though, still has “managed to fortify our confidence to become deeply rooted in China”, according to Saed el-Achkar, regional manager for H&M Greater China.
“We believe that we’re better equipped to offer customers locally relevant products with fashion and quality at the best price in a sustainable way,” he added.
H&M strengthened its digital retail presence by launching an online store on JD.com in September, with more expansion efforts planned, according to Achkar.
