H&M is looking to increase brand awareness throughout China with plans to open the majority of its new stores this year in region despite widespread concern over Asia’s volatile economy.
The world’s second biggest clothing brand plans to open 240 new stores before the end of the year with the majority of them located in China. The Swedish clothing company has already launched 299 stores there this year and is showing no sign of trepidation in expanding in the region despite a third quarter slowdown in the market.
The Chinese market’s recent troubles appear not to have impacted too much on the company however with sales up 11 per cent in the third quarter and predicted to reach nearly $80 billion by the year’s end.
Chief executive Karl-Johan Persson said H&M had a “positive long-term view on China, our position there is strong, as is our profitability”.
The brand is expanding quickly in China which now represents its fifth largest market behind Germany, the US, the UK, and France. Much of H&M’s success in Asia has been attributed to its greater efficiency and speed in its production cycle compared to its rivals in the Asian market.
Torsten Stocker, a partner at consultancy AT Kearney in Hong Kong, touched on this saying “What they offer, none of the local brands can compete with”.
As part of its expansion strategy H&M plans to target China’s growing upper-middle class by opening shops which will sell its premium brand Cos. including a flagship store for the line in the heart of Beijing’s top shopping district.