H&M returns to Tmall but it’s far from business as usual

Fast fashion giant H&M has relaunched its e-commerce business in China and the news is trending on Weibo. Following the fallout from the Xinjiang cotton crisis when the Swedish retailer pulled material from the region, and the discovery that it had signed up to the Better Cotton Initiative (BIC), H&M has faced ongoing backlash from disgruntled Chinese shoppers.

It has been treading water on the mainland ever since. Starting from the second quarter of 2021 onwards, H&M Group’s profits have declined significantly across the mainland. Over that period, the conglomerate also hemorrhaged doors extensively and by the end of 2021, it had lost 60 outlets in the market — accounting for 12 percent of its total network.

In April 2022, H&M Group’s first-quarter report showed that despite an overall sales increase, the Asia-Pacific and Africa region fell by 3 percent year-on-year. In June, it closed its symbolic first store in China on Shanghai’s prestigious Huaihai Middle Road after 15 years of trading. Chief executive officer Helena Helmersson stated then it was facing “a complex situation and not obviously on the level that we would have wished for.”

Now, the company clearly sees Tmall as a soft return but has kept stores on platforms such as JD.com and Pinduoduo dormant. Interestingly, local media reports that direct searches for “HM” on Alibaba’s marketplace are not bringing up the flagship and users must enter “HM official flagship store” to locate the online store.

H&M has relaunched its Tmall store 16 months after the Alibaba site took it down. Photo: Screenshot, Tmall

The news hasn’t gone down well with netizens either. At present, the number of fans of the flagship store stands at 14.33 million which, although notable, shows a drop of nearly 5 million compared with before the closure. Sales have been sluggish too: local media pointed out that as of August 15, many products had zero interest while the most popular item (a men’s t-shirt priced retailing at under $6 (39.9 RMB) had only 15 transactions. “Under their best seller, it was full of negative comments related to Xinjiang cotton and most seem to have bought it in order to leave these bad comments,” Amber Ran, Account director at marketing consultancy Emerging Communications, confirmed. 

The Weibo hashtag #HM e-commerce flagship store is back online# (#HM电商旗舰店重新上线#) currently has 18 million views. Typical comments abound, such as one from upset citizen @Onlyforyou which reads: “I have contacted Tmall customer service to complain.” A post on Douyin has 32,000 comments which include: “Where can I complain?” and “I won’t buy even if it has relaunched online.” One user known as @weiboedu went so far as to ask, “Has Tmall forgiven H&M? Why is Alibaba earning inappropriate money?”

Ran raised another pain point for the company beleaguered in the mainland, that of quality. “There are also product issues brought about by the fast fashion business model. Plus, even though H&M claims to be ‘sustainable,’ how sustainable fast fashion can be given the whole business model is built around over-consumption? But more than that, netizens are still consumed with the BCI incident,” she adds.  

These issues, combined with the disastrous sales and festering negativity online, illustrate the challenging road ahead of H&M as it aims to build bridges with local consumers.