Exclusive Interview With H&M Global CEO: Fast Fashion Is Not Fast Enough.

The whole fast fashion industry is facing severe challenges. Topshop failed in several attempts to enter the Chinese market, but Forever 21 finally pulled out of China and was on the verge of bankruptcy. These 10 years ago, the fast fashion brands were hit by almost fatal problems due to the efficient supply chain operation mode. But in contrast, H&M, COS and other fashion brands can maintain overall stability. Magnus Olsson, general manager of H&M Greater China, believes that the most important change is that consumers are becoming more and more opinionated. They no longer follow the trend of fashion, but are increasingly demanding on brand values, humanization of production process and justification of raw material use. This is exactly the problem that brands need to face and deal with at the moment.
　　 Magnus Olsson has been the general manager of H&M Greater China since 2012.
Yi:YiMagazine
O:Magnus Olsson
Yi: the golden age of the whole fast fashion industry seems to be over. Some brands are leaving the Chinese market, and some are even on the verge of bankruptcy. How did this change happen? Where will the whole industry go in the future?
O: one obvious change is that consumers are getting more and more familiar with the whole fashion industry. The more extensive their knowledge is, the more likely they will be in modeling and fashion. This is not a problem that the past brand can bring to the front of the fashion trend. Consumers even began to put forward higher requirements for the adoption of clothing materials, producing areas, technology and so on. Compared with the past, the entire fashion industry is facing new challenges. It involves the spread of brand image and the transformation of supply chain. For a global brand like H&M, how to integrate the global industrial advantages to face the new market situation becomes very important, because this determines whether you can ultimately adjust yourself to meet the needs of those demanding higher and higher consumers. For example, one of the characteristics of Chinese consumers is that they want to see new things coming into their sight every day, so we have speeded up the speed of providing new products and new series. You can see that today's H&M has almost every day a brand new product on line, which will become a competitive advantage in the market. Another example is that many consumers' perception of the industry is that new clothes must be cleaned before they are bought, so if we can try to eliminate consumers' concerns about the cleanliness of the entire supply chain, they will bring new opportunities for the future development of the brand.
Yi:H&M has recently adjusted the layout of offline channels by closing stores. Has the brand's challenges in inventory and profit margins been reversed over the long term to make the shop strategy prudent?
O: first of all, I want to be clear about the fact that in business society, changing stores and stores is a common strategy for brands to flexibly respond to market changes. This is not necessarily a decision made out of the consideration of the brand itself. We must know that the development and popularity of the business circle are also changing. It is critical for any retail brand to open the store to your target audience in time. As a manager, you need to respond to changes in the channel environment in a timely manner. So when you see that H&M has closed some stores, you should also see that we are opening up new stores, such as this year, we have opened 10 stores. On the other hand, we all know very well that the development of China's electric business is the most advanced in the world, so increasing online investment is also a sensible decision. For Chinese consumers, they do not rely on offline shops to shop, but they do not need only online channels. How to integrate online and offline is an important challenge for future retail brands. Different brands will have different thinking, and there will be two different combinations of channels, so in fact, you should understand it as an optimization process. From another perspective, the necessity of this optimization is that the data collected and accumulated by online channels are very important for brand development. You need to consider the proportion of goods in the store based on past data. In the Chinese market, H&M only has more than 10 million fans of Tmall's flagship store. The consumption preferences of these 10 million people will inevitably affect our sales decisions. In fact, it can answer the question of inventory and profit margin. When you can get more optimized sales forecast, inventory and stock issue will be able to get the corresponding solution.
Yi: in recent years, fashion brands have been moving towards sustainable development. From a macro perspective, it is certainly not a bad thing to invest more in environmental protection, but this kind of investment also raises the cost of production. How do you view this cost increase?
O: the sustainable mode of production does require more manpower and material resources than ever before. This is a test of whether we can cooperate with our partners in a new way of thinking. We need to reach agreement or have a basic understanding with all aspects of the whole industry chain, but the scale of the global companies is huge, and the impact on the environment is much larger than that of small and medium-sized enterprises. At this time, you can not simply invest in cost. After all, all retailers are heavily dependent on natural resources. H&M has a goal in 2040 to become a positive impact on the climate, so we launched the old clothes recycling project in China, which is responsible for recycling any of the brand's production of waste clothing, so far our old clothes recycling scale has reached 78 thousand tons. We will not include the cost of this work in the production process, so the cost increase will not be passed on to consumers.
What specific adjustments did Yi:H&M make to the fast changing tastes of Chinese consumers and the increasing demand for fashion?
O: in addition to establishing a full channel business model, H&M has begun to try to provide local consumers with goods that are more responsive to their actual demands. For example, this year we launched the first series of H&M ANGELCHEN in collaboration with Chinese designers in the history of H&M. Asian fashion series launched a more suitable underwear for Asian market. The process of rapid response to the regional market needs many challenges. You should try to be flexible. For example, the cooperation with ANGELCHEN is the Chinese team's discussion. The Swedish headquarters of H&M just put forward some opinions and oversaw the implementation of the whole project. The project driven by the region can reduce the communication barriers between many global level and designers, thus accelerating the landing process of the whole project. In cooperation with a third party e-commerce platform such as Tmall, we once had an additional opportunity to use third party platform resources. Tmall asked us to provide material in one day, and we often need to control the production of materials from the company level. Finally, through several team cooperation, we worked overtime to complete the production and confirmation process of materials, and achieved high-quality resource delivery.
Yi: which aspect do you most care about in the future city life?
O: sustainable green earth is closely related to people's life, and is also a vital part of corporate social responsibility. In a serious and rigorous manner, we have rooted the concept of sustainability in enterprise values. H&M group began to promote responsible water and chemicals management in the supply chain more than 10 years ago. The group's environmental standards are among the most stringent in the industry. I think it is everyone's responsibility to use various measures to protect the environment. We know that we are in a challenging environment. Therefore, we are very concerned about these issues. In manufacturing, make sure that fashion is so-called recyclable and fashion has a positive impact on the climate. We hope to establish a closed loop fashion fashion to have a positive impact on the environment. Like a country with a mature electricity supplier in China, transportation is naturally very important. The use of new energy in terminal logistics services is also particularly important. As a company that is very willing to support the distribution by electric transportation, we ensure that the distribution service of the buyers in the supply chain, stores and the entire electricity supplier is satisfied. At the same time, we try to adopt an environmentally friendly way of transportation.