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- H&M's local unit is to launch an online offering on Naspers-owned platform Superbalist.
- Analysts say the move is a smart way of expanding without hefty capital outlays.
- South Africans will be able to shop for H&M goods online from Wednesday, 22 February.
- For more financial news, go to the News24 Business front page.
Swedish clothing retailer H&M's local unit is to launch an online offering on e-commerce platform Superbalist in a move welcomed by analysts as a smart way of expanding without hefty capital outlays.
Customers will be able to shop for fashion items for women, men, teenagers and children from Wednesday 22 February, with interior and décor products from H&M Home also available on the Superbalist platform.
Caroline Nelson, country manager for H&M South Africa, said in a statement that the partnership with Naspers-owned Superbalist reinforces the group's "commitment to sustainable growth in South Africa and will complement our current 28 stores across the country".
The company first launched in SA in 2015 with its latest Tygervalley Shopping Centre store in Cape Town set to open on Thursday, 27 April.
Superbalist co-CEO David Cohen said the group was "excited to welcome H&M to the Superbalist family and bring their accessible, trendy yet affordable fashion to millions of online shoppers".
Sasfin Wealth senior equity analyst Alec Abraham said what this deal showed was that H&M did not want to "miss out on any potential opportunities in SA, but at the same time did not want to lay down more capital to open more stores".
"This is a very capital-light way to increase your exposure to a broader market in South Africa outside the locations of where they are without necessarily having to put significant money down. I think it is a very prudent move."
Abraham said that more and more South African retailers were developing online retail platforms, adding that online retail still accounted for a relatively small segment of the market, compared to the US and UK where up online retail sales of mid to high teens were being reported.
Nevertheless, he said it was growing in SA and was estimated to be in the region of 5% of all retail sales now, from probably about 2% to 3% before the pandemic.
"We have seen a lot more activity online. It is a great way to increase your exposure to South Africa beyond the catchment area of the stores you have in a capital-light way."
FNB portfolio manager Wayne McCurrie said while H&M South Africa may sacrifice some margins with this move, it would also save on logistics spend, adding that he thought it was a "very good move".
He agreed that while online retail in SA was still a small portion of the overall retail market, it was growing.
"And certainly the segment of the market they [H&M] are aimed at use online retail a lot more than other people do."
