H&M opens store on Alibaba's Tmall

Fashion brand H&M has opened its online store on Alibaba’s virtual marketplace Tmall, an attempt to revive sales growth and catch up with its major competitors in the fashion industry.

Competition has been fierce on the scene due to fast changing consumer habits and the prevalence of online stores. In response, other apparel brands including Zara, Gap and ASOS have made the same move in the past several years and sold their products through a third party, while the Swedish brand has struggled with the shift to online platforms.

H&M made 200 billion Swedish crowns worldwide in 2017, a 4% growth in sales. The 500 stores in China accounted for 11 billion (US$1.3 billion) of the brand’s total revenues. The profit, however, saw a 13% slump after taxes, which led to a 7% drop in shares that year.

Despite having its own independent online store in China since 2014, the brand feels the need to ramp up customers’ awareness through online marketplaces like Tmall and Taobao, where most of the Chinese customers are.

Magnus Olsson, H&M’s China country manager, said in an interview that H&M, which has launched seven add-on labels lately, is now coping with the demand in the Chinese market by creating more Asia specific or China specific collections.

The company has launched its Monki brand on Tmall and hopes that the partnership with the platform will increase brand recognition in smaller Chinese cities. “In most of the tier 3 or 4 cities where we’re not present, H&M might not be as well known, but Tmall is, so they find H&M through that platform until we come with a store,” he said.

H&M plans to launch its other brands on the platform together with some digital stores in India, Saudi Arabia and the United Arab Emirates this year.