“If everything goes right, the store should be open in the first week of November,” said a person familiar with the development who declined to be named.
The Swedish firm was the first fashion label to announce 100% foreign direct investment in the country, after India relaxed policies governing the entry of single-brand retailers. It said in December that it will invest Rs.720 crore and open 50 shops in the country in the next few years.
The company also wants to sell its products online after local laws permit foreign brands to establish a retail presence on the Internet, said people aware of the development who requested anonymity.
The young Indian shopper is increasingly demanding accessible and trendy fashion wear, spurring demand for labels such as H&M, Forever 21 and Zara, of which the latter has seen some success in the domestic market.
H&M competes with Spanish retailer Inditex that owns brands such as Zara and Massimo Dutti, retailing trendy clothing and accessories for women, men, teens and children, mostly in Europe and the US. Zara entered India in 2009 through a joint venture with Trent, the retail arm of the Tata group.
H&M is entering India at a time when other retailers such as Japan’s Uniqlo and American label GAP Inc. are actively pursuing India entries. GAP has been in advanced talks with prospective joint venture partners for its India entry, a market from where the apparel retailer has been sourcing material for its international operations.
About 80% of H&M’s sales are still in Europe, while Inditex, with more than 6,000 stores in 86 countries, makes about 20% of sales in Asian economies versus 6% for H&M, Reuters reported on 12 February. The company plans to open 375 new stores worldwide in 2014, including 80-90 in China, the news agency reported. It currently operates 3,100 stores across 53 markets.
The apparel market accounts for 6% of India’s consumption expenditure and is expected to touch $225 billion (around Rs.14 trillion) by 2020, a fourfold increase in the space of a decade, according to a 2012 Boston Consulting Group report. No figures are available on the share of fast fashion brands.