Hennes and Mauritz, a Sweden based fashion retailer brand has recently overtaken its prime rival Zara to become India's largest clothing brand by revenue in the FY19-20, helped by aggressive store expansion and decrease in prices.
Swedish brand H&M expanded its gross sales revenue 28% to Rs 1,582 crore within the course of the 12 months ended March 2020, in accordance to its newest submitting sourced from Altinfo, a knowledge insights agency. Meanwhile, Inditex Trent, a three way partnership with Tata that runs Zara stores in India, noticed income rise 9% to 1,570 crore final fiscal.
H&M was launched in India in the year 2015 and since then, it has taken over its rival Spanish brand which can be attributed to its aggressive store launches, budget friendly pricing and digital presence. Even though Zara has its own digital presence, customers are not able to shop from the website many times as the minimum shipping charges are expensive. Zara's growth has been tapering off even though its per-store revenue is nearly double that of H&M.
While the distinction could also be small, H&M’s income is critical contemplating it entered India in 2015, 5 years after Zara opened its first door in 2010.
During the COVID-19 induced lockdown, H&M rose to the situation and increased online promotions and initiated targeted campaigns for home clothing and made impressive use of an opportunity during a crisis. With the pandemic reducing the real incomes and purchasing power of individual shoppers, brands that are easily available online and offline will be in vogue.
H&M retains a huge stock of regular basis gadgets sourced from India and Bangladesh that carry lower cost tags than these most of its rivals. On the other hand, Zara imitates the most recent style, making inexpensive variations and stocking them for only a few days. Zara had minimize costs to maintain competitors over the previous few years.
The pricing strategy of the two retailers varies dramatically:
H&M’s women’s apparel pricing spans from $2.99 for a short camisole top to $349 for a cashmere-blend coat. Meanwhile, Zara’s pricing ranges from $5.90 for a cropped top to $219 for a belted coat. Although the cashmere coat pushes up H&M’s current exit price, its average price still comes in below Zara at $27.61 compared to $40.46.
H&M currently have 21% of its entire online offering on discount, with 39% discounted between 50-60%. Zara, in contrast have 6% of its online offering discounted.
H&M is known for collaborations with designers such as Giambattista Valli, Alexander Wang, Moschino, and more, while Zara works with fashion insiders to endorse its products.
Comparing email newsletters, Zara strikes an equal balance between its women’s, men’s and kid’s collections while H&M focus predominantly on advertising womenswear.
Zara had reported its first loss since going public 2 decades ago due to coronavirus pandemic, Two months later lockdown has forced Zara to shut down almost 90% stores in every country which has caused a drop in his first-quarter sales.
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