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While pointing out that these were early days still, referring to opening stores in India, Persson said that H&M made a presentation to the commerce minister to show what the group wanted to bring to the Indian market. “We find the Indian market very interesting and we have been looking at it for quite some time,” he said.
Sharma offered support to H&M in terms of linkages with design institutions such as Footwear Design and Development Institute, National Institute of Design and National Institute of Fashion Technology.
Refusing to make any commitment on the quantum of investment, Persson only said: “We will see... It’s a huge market. We are not there yet.” The investment would depend on the time frame of H&M’s entry into the market, he said, adding “but the potential is enormous”. On the single brand retail policy, he said, “we are happy with it and we will comply with the policy as it stands”.
H&M is likely to start its India operations with a few stores and then increase gradually. “I don’t want to say how many stores,” Persson said replying to a question. “We will start with a few stores when we enter and we will see if everything goes as we hope, then we will expand heavily from there.” Indicating that there’s a huge interest in fashion in the Indian market, the CEO said that H&M would offer something new to the Indian market in terms of fashion and quality at great prices. “Hopefully, we will get a good reception.”
Persson said that H&M already sources significantly from India and that the group would increase sourcing as it grows.
H&M competes internationally with stores such as Zara. Spanish chain Zara, from the Inditex stable, is already present in India through a joint venture with Tata group’s Trent. Inditex wants to bring its other brands such as Massimo Dutti to India.
After the rules for single-brand retail was relaxed more than a year ago, permitting up to 100 per cent foreign direct investment (FDI) in the sector, many international players have shown interest, including Pavers, Decathlon Sports, Promod, Le Creuset, Brooks Brothers, Damiani and Fossil, among others. Some of these have come with local partners in India.
But the biggest proposal so far is from the ^25-billion furniture group IKEA, which wants to invest Rs 10,500 crore in India in phases. While the Foreign Investment Promotion Board has approved the IKEA proposal, it will be taken up by the Cabinet Committee on Economic Affairs soon.
Besides H&M, American major GAP, too, is exploring the India market.
The government raised the FDI limit to 100 per cent from 51 per cent in January 2012. Even as the government allowed up to 51 per cent FDI in multi-brand retail in September 2012, not a single company has applied yet.
