PRAKRUTHI PUTTASWAMY

PES1UG21BB198
SM CASE – 2

PROBLEM/ BACKGROUND: Customers in China recently voiced their displeasure with a

number of Western brands, including H&M and Nike, when those organisation concerns over
the suspected use of Uyghur forced labour in cotton manufacture.
As a result of the issue over the suspected use of Uyghur forced labour in the manufacturing
of cotton, H&M had been banned in March from both the Chinese e-commerce site Tmall
and the app stores of regional phone makers.
Later in March, H&M made the announcement that it was devoted to regaining the trust of its
Chinese business partners and consumers and that it remained strongly committed to the
country

INTRODUCTION: H&M and a number of other western clothing companies are facing
criticism in China due to their concerns over the use of forced labor in the manufacture of
cotton.
China is said to have forced the mostly Muslim Uyghur minority in Xinjiang to harvest
cotton. Popular Chinese businesses and contests have recently become the focus of boycotts.
In a news conference on Monday, Xu Guixiang, a spokeswoman for the Xinjiang
government, emphasized that companies shouldn't politicize their commercial activities. The
issue at hand is whether H&M will still be able to produce in China, but not just now.

INDUSTRY ANALYSIS: H&M intends to offer its luxury brand Cos in additional locations,
including a flagship shop for the line in the center of Beijing's retail area, as part of its effort
to reach the upper-middle class. H&M's ambitious development strategy includes both
Significant purchases have also been undertaken by the firm, such as the 2007 purchase of
high-end clothing maker Cos.
Customers complain that certain H&M clothes are very pricey to buy since they are high
fashion. Contrarily, H&M prioritizes satisfying consumer requirements while reducing labor
and delivery expenses while still offering high-quality products. H&M offers apparel from Rs
399 to Rs 7999.
Promotion of a Good boost identification H&M established a multi-channel marketing
strategy that integrates advertising, sales, and online all over world. Customers are also
attracted to the firm because it promotes its name and offers discounts on its items.
Setting a Plan H&M was able to develop strong relationships with its customers by running
stores in a variety of cities throughout the world. High-end H&M items are made in Turkey,
while its low-end products are made in Asia.
CASE ANALYSIS: The original boycott targets in China were Nike and H&M. It was
claimed that stock from the latter had been withdrawn from major e-commerce sites and that
some of its outlets had been shut down nationwide.
Converse, Adidas, and Burberry are now included in the boycott, though.
The cotton issue started when the US and other western nations put more pressure on China
for alleged human rights violations in Xinjiang.
China is accused of seriously abusing the local Uyghur population's human rights.

ALTERNATIVE SOLUTION:
A large portion of H&M's quick growth may be traced to its fast-fashion business model. Fast
fashion needs to be able to transfer a lot of products from the designer table to the showroom
floor rapidly and economically. Their goods are intended for young, urban customers who are
interested in fashion. They are fashionable, affordable, and essentially disposable.
Unsurprisingly, many who support ethical and environmentally friendly buying have
chastised them for it.
By keeping their product pipelines current with the newest trends and having a rapid product
turnover rate, fast fashion retailers are able to generate profits. Another element of H&M's
business approach is a capable marketing supply that can swiftly what the target market
wants and incorporate it into the supply chain. The only other fashion retailer in the world
right now after H&M is Inditex, the business that runs Zara stores.
CONULSION:
H&M has a large market share in the global fashion business. They are doing an outstanding
job of utilizing digital marketing to achieve their lofty corporate and marketing goals. H&M
has adjusted its approach and regularly altered its business model in response to increased
competition and the introduction of microbrands and websites. All of this has contributed to
the rapid ascent of H&M.