Swedish retailer Hennes & Mauritz (H&M), known for its fast-fashion in India, is planning to bring its global furniture business to India, according to Janne Einola, CEO and Country Head, H&M.
"Few weeks ago, there was an announcement on import duty on furniture. Preparation from our end was already done now because of the changes in duties we will have to re do the process and decide the right time to introduce H&M Home in to the country. Currently, we are looking for the location and deciding on what kind assortment can be done whether online or offline," Einola said on the sidelines of the Retail Leadership Summit.
In the Union Budget presented on February 1, the Finance Ministry proposed to increase import duty on wooden furniture to 30 percent from the current 20 per cent. The ministry has also proposed to increase import duty on wooden furniture to 30 percent from the current 20 percent.
He agreed that home business is different from the textile business when it comes to logistics and online presence.
The fashion retailer is also planning to bring in its beauty business to India. However, he did not give the timeline for both the businesses.
"As retailers, we keep evaluating businesses which can bring in more revenue. So far we have planned to bring in home and beauty businesses to India," Einola said.
When asked on sourcing goods, Einola said India is a 'big part' for home sourcing globally, specially hard goods such as wood. He added sourcing of goods from India is higher than the apparels globally.
On the impact of coronavirus outbreak, Einola said: "Lot of factories in China are closed. Our advantage as a company is that there are many sourcing markets for us other than China."
However, he did not disclose how much of this sourcing would be moving to India.
"The biggest barrier in India is that there is no free trade agreement. So in the absence of any free trade agreement it will be costly affair for us to source from India," Einola said, adding they have free trade agreements with US and Europe.
H&M has been sourcing products from India for more than 30 years.
IMPACT OF SLOWDOWN
"We have not faced slowdown, in fact, we have seen positive trend in our sales and traffic in our stores is increasing," Einola said.
He also said that strong growth in Tier-2 and Tier-3 markets has made up for the weak sales in urban markets.
Einola feels that pricing is one of the company's strength as products are procured directly from the suppliers, and no middlemen are involved in the process. The consequent saving in costs is passed on to the consumers.
Going forward, H&M is also contemplating slashing prices of its products. Currently, Zara is H&M's biggest competitor.
Einola informed that the company has opened one store a month in India on average so far since setting up shop in October 2015.
So far, it has become a Rs 1,500-crore business with 47 stores, across 24 cities in India.
The company is planning to expand its retail presence in Bhubaneshwar and other smaller cities. A loyalty programme is also on the anvil.