Following in the footsteps of online retailer SHEIN, H&M has adopted a similar approach by significantly reducing the prices of select tops to as low as $1.70. Specifically, one of their crop tops, originally priced at $4.99, received a markdown of nearly 70 percent. These steep price cuts seem to align with SHEIN’s strategy of competing for customers by offering highly competitive prices.
SHEIN, a Singapore-based online retailer, gained substantial popularity during the pandemic as customers sought affordable options with budget-friendly price tags. With its single-digit price points on numerous items, SHEIN emerged as a prominent player in the fast fashion industry. In fact, its valuation soared to $100 billion last year, surpassing the combined valuations of H&M and Zara (though it has since decreased to $66 billion, as reported by The Wall Street Journal).
Despite concerns surrounding the environment and labor practices, SHEIN continues to enjoy popularity among consumers, who are spending an average of $100 per month on the platform. This expenditure surpasses the average spending by American women by 60 percent, highlighting the retailer’s strong influence in the market.
According to UBS data, SHEIN is currently the most searched apparel retailer on Google and ranks among the most downloaded shopping apps in the United States. Meanwhile, H&M has experienced a rebound with its successful summer collection, reporting a 10 percent increase in sales compared to the same period last year.
While H&M and SHEIN differ in their approaches and brand positioning, they both recognize the importance of catering to price-conscious consumers. By implementing significant price reductions, H&M is aiming to attract customers who prioritize affordability in their fashion choices.
However, it’s crucial to note that these rock-bottom prices come with concerns related to sustainability and fair labor practices. Fast fashion’s rapid production cycles and low-cost manufacturing processes have drawn criticism for their detrimental impact on the environment and workers in the fashion supply chain.
Nevertheless, as the demand for budget-friendly fashion continues to grow, retailers like SHEIN and H&M have tapped into this market segment. By providing accessible and affordable options, they are effectively engaging with consumers and establishing their foothold in the highly competitive fashion industry.
Ultimately, while the strategies of SHEIN and H&M may align when it comes to offering competitive prices, it remains to be seen how ethical and sustainable practices will be prioritized moving forward. As consumer awareness about these issues increases, fashion brands will face mounting pressure to address them responsibly and find a balance between affordability and sustainability.
