H&M fast fashion business model in China

University essay from Högskolan i Gävle/Avdelningen för ekonomi; Högskolan i Gävle/Avdelningen för ekonomi

Abstract: ABSTRACT Title: H&M fast fashion business model in China Level: Bachelor Degree in Business Administration Author: Yuanyuan Yang & Jun Wang Supervisor: Ernst Hollander Date: 2013-03-11   Aim: Business model have been applied to different industries, and many entrepreneurs consider a good business model to be half the success. As per our observation, there were problems existing in H&M in China, for example, quality problem, price advantage lost and so on. However, H&M still has a good sale performance in China and we believed it largely depends on its successful business model. This study aims to examine what H&M fast fashion business model is and how H&M’s business model influences its development in China in different period.   Method: The method we used consisted of research process, research approach and data collection. A qualitative research was developed in the way of interviews. Primary data was collected from the interview which we conducted with two interviewees of H&M employees from different countries and the other interviewees both work for Chinese fashion industry. Secondary data included relevant extant literature, articles and online resources. As a research tools, SWOT was used to analyze the operation of H&M in China. With the collected data and the previous analysis, the result presents H&M’s short-term, mid term and long-term development in China.   Result & Conclusion: The unique business model is the main reason H&M have such good sales performance even when they have many problems as we had observed from their retail stores in China. H&M makes good use of its supply chain and information system to ensure delivering right products to their customers in the right time and at the right place with the right price. We believe the strengths of its business model would bring a lot of benefits for H&M in short-term development and mid-term development in China. As for the long-term development, the weaknesses of its business model maybe bring some problems.   Suggestions for future research: Quality problem and supply chain pollution is important for H&M’s long term development in China. Therefore, to ensure products’ quality and supply chain management improvement could be studied in future. Moreover, since business model consisted by lots of aspects, in-depth study is necessary in order to better understand H&M business model. Last but not the least, Chinese local fast fashion industry is still on the initial stage and thus, to borrow idea from H&M’s business model to develop Chinese fast fashion industry is interesting and important to be studied in the future.   Contribution of the study: Fast fashion business model have been created based on the business model and fast fashion characteristics. Hopefully, it would be helpful for further study which focuses on fast fashion industry. The specific knowledge of China is able to compensate the situation that most studies are focus on developed countries.   Key words: fast fashion in China, H&M in China, clothing industry, fast fashion business model, China

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