PARIS — Hennes & Mauritz AB confirmed media reports stating it intends to file for a wholly owned subsidiary in India shortly, which will allow the high-street giant to set up its own shops in the country.
The Swedish company’s move proves just how much potential the Indian market bears for foreign retailers. The world’s third-largest economy (measured by purchasing power parity) boasts a vast middle class with a healthy appetite for western products.
“India is one of many interesting markets for H&M, and we have started to investigate the possibilities of opening H&M stores [there],” a spokesman for H&M told WWD. “Therefore, our ceo Karl-Johan Persson met with the minister of commerce, Anand Sharma, to discuss our future interest of opening H&M stores in India and investing in the market.”
Although the spokesman would not reveal any details regarding the number of units H&M plans to open or the time frame it has envisaged, he noted: “We see that we can comply with the existing policy of single-brand entry [in India],” which obliges foreign retailers to source 30 percent of their goods from local businesses — a rule that is viewed as tricky and that may pose an obstacle for luxury brands that rely on their savoir faire and have strict quality guidelines.
It was only last year that the Indian government, keen on spurring its economy through foreign investment, changed its policies to allow foreign retailers to own their Indian subsidiaries.