H&M diverts its focus on African Textile Market with budding middle class

Hennes & Mauritz (H&M), Swedish based global clothing giant, who sources most of the garments from factories in Asia, particularly Bangladesh, and the world’s second biggest textile manufacturer after China. However, election-related violence in the country has strained its garment industry.

H&M has decided to shift its focus to sub-Saharan Africa’s textile market as opposed to its previous reliance on Asia. H&M has already started producing clothes on a small scale in Africa to complement the company’s production in Bangladesh, China and Cambodia, where it sources most of its textile materials

CEO Karl-Johan Persson of H&M said that there is great potential in sub-Saharan Africa when it comes to production. They have started producing on a small scale in Ethiopia and they will see how it goes. It seems very interesting now.

Persson believes that Africa has great sales potential with its emerging markets and a “growing middle class.”

According to the African Development Bank, Africa now has the fastest-growing middle class in the world. With some 313 million people, 34 percent of Africa’s population, spending $2.20 a day, this represents a 100 percent rise in less than 20 years and a huge potential for retailers.

H&M also plans to carry out a survey on production opportunities in Africa. They are looking at several African countries, like South Africa

According to Persson, there won’t be any dramatic changes in the distribution of production in the short term, but there may be bigger changes in the long term. But it will depend on prices, quality and lead time.