H&M is cautiously optimistic about selling in China

In August H&M returned to China’s e-commerce platform Tmall, a year after it had been removed after a boycott when it raised concerns regarding Xinjiang cotton and the forced labour of the Uyghur community. The extend of labour camps first came to global attention in a 2020 report by the Australian Strategic Policy Institute (ASPI).

H&M was swiftly banned from Tmall after a backlash from a campaign let by China’s state media. The ban hit H&M revenue hard as China’s e-commerce was a major profit driver for the Swedish retail giant. But things are looking up, with H&M telling the Financial Times on Tuesday it was cautiously optimistic and positive. “We are taking steps in the right direction but it’s slow,” H&M CEO Helena Helmersson told the FT. “It’s still a complex situation.”

H&M is yet to return to JD.com, China’s other major e-commerce player, where it was also removed from selling its collections.

In June H&M closed a three-story flagship in Shanghai, amid a reported weak retail performance. The group also ceased operations of its Monki brand in April, while opening a second outlet of its &OtherStories brand in Beijing.

The Chinese retail landscape remains troubled for H&M and is no longer in the top ten of its highest revenue markets. Geopolitical issues aside, inflation, the effects of the pandemic and rising material costs are forcing retail groups like H&M to cut costs, which includes store closes and employee layoffs.