H&M South Asia weaves sustainability, affordability into the fashion scene

It is also working towards improving the customer experience by upgrading stores and partnering with marketplaces.

As a leader in the fast fashion industry, H&M has turned their focus on optimising its channels — both physical stores and online — to offer customers a seamless experience. But this is only one of its priorities as H&M South Asia is also bringing its attention to ensuring sustainability is integrated into their operations.

“Sustainability has always been at the core of our company. For us, it is not just about democratising fashion. But it is about democratising affordable and sustainable fashion. It is integrated into our business idea,” Oldouz Mirzaie, H&M South Asia managing director told Retail Asia.

Overall, Mirzaie said 84% of the materials H&M uses are derived from more sustainable sources.

In South Asia, this sustainability drive is not only reflected in their product offerings but also in their physical stores such as Singapore’s flagship store in Orchard Road, which uses a sustainable textile, i-Mesh.

Mirzaie also shared more about the significant milestones H&M achieved in the South Asia region which covers Singapore, Malaysia, Vietnam, the Philippines, and India, as well as the transformations made in the operations to overcome challenges.

How has H&M performed so far in South Asia?

Overall, we’re very happy with our growth trajectory. In the first half of this financial year 2023, the overall Asia, Oceania and Africa region has been performing with a 6% growth versus the same period last year. 

This is a fast-paced industry. What emerging trends in the apparel industry have you observed in the region?

Throughout the pandemic, we saw a rapid acceleration of digitalisation. This is a good thing for us but it also means that we had to look into our operations and define a different channel strategy. Our physical store portfolio remains very important but it is equally crucial to understand the purpose of the different channels. A physical store experience needs to offer a lot more nowadays than simply transactions, and that is the trend we see. It is about really building an emotional bond and offering the customer an immersive experience.

Technology also plays a big part in being immersed and integrated into fashion, for example, through digitalisation, digital clothing, artificial intelligence (AI), or augmented reality experiences. The customers now determine when, where, and how they want to shop, and we as brands need to adapt to the pace and the demands of the customer.

Sustainability plays a really big role amidst these developments. Sustainability has always been at the core of our company. For us, it is not just about democratising fashion. But it is about democratising affordable and sustainable fashion. It is integrated into our business idea. We see a lot of emerging trends where the customer is paying more attention to how clothing is sourced.

For us, it is very important to make an ethical and sustainable choice for our customers. We have very clear goals at the H&M Group, where we want to halve our greenhouse gas emissions by 2030 and achieve net zero by 2040. That trickles down into everything that we also do in the Asia region and a lot of sustainability initiatives that we have, for example, also integrated into our newest flagship store on Orchard Road.

How was your leadership navigated to adapt to the trends and transform your operations?

First of all, it is about listening to the customers in this dynamic region. A big part of this has been to integrate our physical and digital shopping channels. For us, it is about modernising and digitalising our physical portfolio. A great example is our revamp of our Singapore flagship store, where the customer can be welcomed to a brand-new facade made of a sustainable material called i-Mesh, which is the first of its kind in South Asia.

It is also about being able to predict consumer demand and supply, to make us both faster and give us better precision when it comes to the customer offer. This also creates a much more sustainable business model.

One of the things that we have also done is to improve our customer promise. For example, we opened up an online warehouse in Malaysia earlier this spring so that we can deliver to our customers a lot faster in a much more sustainable way. Overall, sustainability has been a big part of our leadership - we are really integrating it into our entire value chain, and we are moving towards our 2030 and 2040 goals. Everything starts with our offerings, and today we’re very proud to say that 84% of our materials come from more sustainable sources.

What were the significant milestones H&M South Asia has achieved under your leadership?

I took this current role during the pandemic. We all know it has been challenging times at large. But of course, taking over a new region and getting to know new cultures, new consumer behaviours, and such rapidly changing behaviours was, personally, a challenge. But at the same time, I think that challenge also presented an opportunity.

While we are keeping up with changing consumer behaviours to understand what the customer expects of us, we were already investing in our physical store portfolio and we knew that we needed to digitalise a lot more. This is another big step for us in the last couple of years.

We have also opened up some partnerships with marketplaces, such as Zalora in the region, optimised our online site and opened the Malaysian online warehouse. H&M South Asia has launched a membership programme across Singapore, Malaysia, Vietnam and India, and we also launched hm.com in Vietnam this year.

It is all about allowing our customers to shop on their own terms. We optimise our various channels, invest in our store portfolio, and upgrade stores, making them places where customers want to spend time with us and where they gain a lot more inspiring experiences, with sustainability being a big focus.
 

Moving forward, what are your priorities in driving the growth for H&M South Asia?

H&M’s business idea is founded on offering fashion and quality at the best price in a sustainable way. For us, it’s about delivering our customers the sweet spot of that. That means continuing to work on fashion, which is our customer offer, and improving it by injecting local relevance.

We have differences in cultural perspective, seasonality, and sizing. It is about exciting the customer, and continuing to have both global and local collaborations for both our apparel and our lifestyle brands.

We continue looking at the value for money and the value that we offer, remaining competitive and being able to offer a desirable and affordable product. And of course, on top of it, the customer can make more sustainable choices with us.

We want to become a destination of choice where customers don’t just come to us to find their style, but to spend time with us, build emotional bonds, and engage.
 

What more can we expect from H&M South Asia?

South Asia is and remains a very important region for us and for the entire H&M Group. We already have great growth and we continue to see great growth potential. This means continuing to work and optimise our physical store portfolio, integrating different channels to create a more seamless and convenient omni-shopping experience for our customers, from the store to post-purchase.

We have also been continuously looking at optimising our offers, for example, bringing the lifestyle brand H&M Home to Singapore. We are continuing to look into further collaborations - for instance, we have just launched on Shopee in Singapore and Malaysia, and you can stay tuned for more exciting announcements.