H&M continues to fail in China | Marketing
In early June, H&M was caught in the crossfire again when it infuriated Chinese customers after officials said they had banned several of the brand’s products over safety concerns.
A notice posted on the China Customs General Administration website announced that authorities would take action against H&M for manufacturing low-quality dangerous products that do not meet China’s quality and safety standards, according to The Indian Express.
As stated in the advisory, nine lots of H&M cotton girls’ dresses contained harmful coloring additives and other chemicals that could be dangerous if ingested or absorbed through the skin.
Western media allege Beijing is targeting global fashion brands that have made statements about forced labor in Xinjiang. And while some actions may seem like retaliation, China isn’t the only country to accuse the Swedish retailer of producing shoddy clothing, despite its commitment to sustainability.
For example, in 2019, the United States Consumer Product Safety Commission (CPSC) announced that H&M would recall two sets of children’s pajamas because they violated the federal flammability standard. And in 2014, the CPSC reported that the Swedish retailer had recalled girls’ leggings due to choking hazards.
In an increasingly polarized world, it’s easy to forget that the Swedish retailer faced serious challenges in China even before these threats to its boycott of Xinjiang.
What went wrong with H&M in China?
In the wake of a retail revolution, fast fashion retailers are now facing a new reality in China that opposes excessive consumerism.
As consumers become more sophisticated, they expect unique shopping experiences across every channel and point of touch; thus, they stop prioritizing prices and discounts. This will favor incumbent retailers who produce unique designs and offer personalized experiences, but will penalize fast fashion retailers who sell cheap and made clothes quickly.
China Daily had already highlighted this phenomenon in 2019 when it analyzed the challenges facing fast fashion retailers in China. âMany foreign fast fashion brands have experienced a slowdown in Chinese market growth in recent years, in stark contrast to the early days when they could make money quickly and easily,â China Daily said. “But now they are struggling to meet the growing demand from Chinese consumers for quality products.”
Fast-paced retailers face a longer downturn, and H&M is no exception. While Uniqlo understood the ânew consumer modelsâ of Chinese shoppers and built legions of super-fans out of the superior quality of their clothing, H&M lost the market because it failed to meet growing consumer demand for quality products.
According to China Daily, from 2014 to 2018, Uniqlo’s market share fell from 0.7% to 1.2% in China, but H & M’s market share remained constant at 0.4%.
Western aesthetics have lost their authority and influence
In recent years, Western styles and trends have lost their influence. With the rise of patriotism, there has been a revival of traditional Chinese culture and fashion trends, but international fast fashion retailers have ignored the new reality and have continued to promote the same old Western models. Additionally, H&M failed to locate correctly. In fact, H&M clothing has a strong Western aesthetic that doesn’t resonate with Chinese customers.
H&M released a collection with Irish designer Simone Rocha in March. Photo: H&M Weibo
âMost foreign fast fashion brands don’t do a good job of localizing because they don’t know enough about the business culture and consumer mindset in China,â said Zhao Ping, deputy director of the Chinese Academy of Commerce. international and economic cooperation of the Ministry of Commerce, to China Daily. âThey think that since fashion brands are from developed countries, Chinese consumers will buy them easily. This is no longer true now.
Low prices and promotional discounts make no difference in China
Chinese netizens claim that H & M’s only leverage is that it offers lower prices. But that cannot be seen as a competitive advantage in a country like China, known as the world’s largest producer and exporter of apparel, textiles and clothing.
Chinese consumers already have access to trendy and inexpensive clothing designed by national players based on the taste preferences of local consumers. As such, China doesn’t need affordable Western brands.
In the near future, H&M is expected to avoid controversy and focus on expanding its product lines to incorporate items that reflect local culture. In addition, the Swedish retailer should improve the quality of its ready-to-wear line and take its commitment to sustainability and social responsibility more seriously.