Done by Carole Flamion Wee Beng Seow COVERAGE

Done by: Carole Flamion Wee Beng, Seow

COVERAGE OF PRESENTATION v H&M Story and Overview v Fast Fashion Market v H&M Main Business Activites v H&M Business Model v H&M market segments and targets v Competitor Analysis v SWOT Analysis v Challenges faced by H&M v H&M Marketing Strategies v 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 & 1980 Mauritz s • 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 • 1980 s: Stores open in Germany and the Netherlands • 1998: First store open in France. H&M online shopping begins 1990 • 2000: First US and Spain stores were open. Continual expansion in the European market s 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 Fa. Bric Scandinavien AB, -2013 which comprises the brands Weekday, Monki and Cheap Monday • 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 v First H&M store opens in China, Shanghai in 2007 v Currently, 170 stores in China-wide v 4 COS stores v 5 Monki stores

FAST FASHION v Collections based on the most recent fashion trends presented at Fashion Week v Designed and manafactured quickly & cheaply v ZARA, H&M, Peacocks and Topman leading retailer in fast fashion collections v Deliver designer products to a mass market at a relatively low prices v Category Management v Quick Response Method v Supply chain

FAST FASHION MARKET - KEY FIGURES

FAST FASHION MARKET IN CHINA v Metersbonwe, La Chapelle and online retailer Vancl emerged as local fast fashion contenders v Building strong footholds in smaller, relatively untested third and fourth tier cities v Competitive pricing v Comparatively easy access to suppliers and distribution networks.

OPPORTUNITIES AND POTENTIALS v H&M plans to increase presence in lower tier cities by 2015 v Even in the face of an expected economic slowdown, growth of China’s apparel industry is likely to outpace the nation projected GDP v Highest rate of expansion to take place in China v Landlords of shopping centres aggressively pursue leasing deals with international brands such as H&M v Online shopping expansion v Attract next-generation consumers

KEYS TO LAUNCHING NEW BRANDS v Finding new customer segments that have synergy with an existing brand such as COS and Monki v Determining the right positioning in those segments, including product characteristics that are differentiated from the mass market and that target customers will welcome v Assembling an experienced, knowledgeable management team

H&M ADVANTAGES v Active use of celebrity endorsements v Mass media marketing v Presence in China social media, Sina Weibo and Youku channels v APPs on smartphones v Association with the younger generation consumers v Large and diverse team of designers and management team to ensure fashion, quality and sustainability in its products

H&M MAIN BUSINESS ACTIVITIES v H&M offer collections that are wide-ranging and varied for women, teenagers and children v Offer inspiring fashion with unbeatable value for money v Aim is to always exceed customers' expectations on v Ensure the best price byquality 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 v Outsource the production process v H&M buy clothes and other items through an abundance of detached suppliers v Its purchasing depends on what sells well and what the market situation looks like. v H&M has established an efficient distribution channel v It makes good use of its supply chain and information channel v A unique business model that permits H&M to have such good sales performance

FINDING THE PERFECT FIT v Women, teenagers and children’s markets v 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 v H&M fashion year is segmented into 2 sections mainly: • Spring/Summer • Fall/Winter v Through its promotional videos on social media like Youku, H&M portrays a young and hip culture to its fashion line

INTERNATIONAL COMPETITORS v Main competitor: ZARA (Spain). v Upcoming competitors in the industry: • Uniqlo (Japan) • Forever 21 (US) • Topshop (UK)

DOMESTIC COMPETITORS Following international trends v Metersbonwe, sub brand: ME&CITY v URBANEIGHTDAY v VANCL (Online)

MOST VALUABLE APPAREL BRANDS IN CHINA, 2012

SWOT ANALYSIS v 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 v WEAKNESSES - Product recall - Knowledge of the Chinese market v OPPORTUNITIES - Business expansion in new and existing markets - H&M Home initiative - E-commerce markets i. e Online shopping v THREATS - Intense competition - Declining consumer confidence

H&M OBSTACLES v Fashion has a limited shelf life even more so for fast fashion v External factors in production countries v Labour rights and environmental issues v Balancing low price strategy with Fast Fashion strategy v Balance long lead time of outsourcing with agility fashion business v Threat of substitutes v Bargining Power of buyers

H&M’S MARKETING STRATEGIES v Collaboration with exclusive collections with top designers such as Karl Lagerfeld, Victor&Rolf, Stella Mc. Cartney and Roberto Cavalli, Versace v H&M associate itself with internationally famous celebrities to create more awareness for its brand • Gisele Bundchen, face of A/W 2013 collection v In Europe: H&M design award, « Moving fashion forward »

RECOMMENDATIONS v Expand into lower tier cities v Increase social media presence in China such as We. Chat v Promote environmentally friendly production process v Engage local celebrities to be involved in H&M advertisements v Create an online shopping portal for the Chinese market

THANK YOU FOR YOUR ATTENTION!