Fashion retailer H&M is investigating the possibility of introducing its global loyalty programme to South Africa, where loyalty schemes have become a critical driver of where and how consumers shop.
According to the recent South African “Loyalty Whitepaper” report by Truth & BrandMapp, loyalty programmes are now embedded in the daily lives of local consumers who face sustained cost-of-living pressures.
Keroshan Naidoo, acting country manager for H&M in South Africa, said: “We have a loyalty programme globally, and we will launch it when we find the best fit for the local market.”
The Swedish clothing group has been in South Africa for more than 10 years and has taken a cautious approach to launching new stores. It has 29 so far, with the last one opened two years ago. It employs about 900 people locally.
Naidoo said future growth will emphasise quality over quantity, with a focus on key locations, strategic mall placements and formats that reflect changing shopping habits. “It’s about the right city, the right mall and even the right space inside that mall, and that takes time,” he said.
Committed to growth
He stressed that H&M remains “very much committed to growing in South Africa” but is unwilling to chase expansion targets for their own sake. “It’s not about opening as many stores as possible — it’s about finding the right locations and reaching the right customer,” Naidoo said.
H&M plans to open its 30th store in the Western Cape in the second half of the year. However, Naidoo said the group does not work with a fixed store-count target; instead, it focuses on securing locations that make commercial and strategic sense for the brand and its customers.
H&M’s strategy mirrors a broader shift in global retail, where foot traffic concentration and experiential shopping have become critical to store economics. The retailer’s South African portfolio spans a mix of formats, from smaller outlets in regional centres to large flagship stores in high-density urban malls.
Over the past two years, H&M has broadened its offer beyond clothing and homeware by adding beauty. In 2022 it launched a standalone H&M homeware business and in 2024 introduced beauty products. Selected fashion stores also stock assorted homeware.
Naidoo said the company is considering whether to open more standalone homeware stores. For its children’s clothing segment, it was putting “a lot of focus” on customer experience. “We now design play areas within our stores, especially at shopping centres where there is so much to do for kids,” Naidoo said.
H&M imports everything it sells in South Africa. Naidoo said the group is exploring local sourcing, but any move in that direction would have to be aligned with its global supply chain.
He said if H&M decides to produce locally, it will need to manufacture items not only for South African consumption but also for the global market, ensuring sufficient scale and consistency.
Each year there is a focus on delivering a better assortment for customers. Each season we learn, we have various deals on offer that support customer needs
— Keroshan Naidoo, acting country manager for H&M in South Africa
Over the past three years, H&M South Africa has been collaborating with local designers to offer limited fashion ranges, a strategy it has extended into homeware.
One of the company’s most significant global wins from the South African market was persuading the group to develop “curvy fit” denim for local customers.
“This was such a positive thing for us,” Naidoo said. “It was launched in 2020. We shaped the global organisation to develop it. It was very well received — we had influence. Our local relevance is a priority.”
The curvy denim range was not only a success in South Africa but also sold strongly in markets such as the US.
“Each year there is a focus on delivering a better assortment for customers. Each season we learn, we have various deals on offer that support customer needs.”
H&M Group sources the majority of the wool used in its products from South Africa. Spokesperson Lauren Hartzenberg said that in 2021, WWF and H&M launched a regenerative wool production partnership in the Eastern Cape Drakensberg grasslands, one of the country’s key eco-regions for wool production.
“The project has supported large-scale private landowners, emerging farmers and small-scale farmers across more than 10,000ha to adopt regenerative wool production practices,” Hartzenberg said. “Through long-term conservation agreements, the farmers and the community work with WWF to maintain and improve the ecological health of the grasslands.”
Despite a challenging retail environment, H&M remains upbeat about its position in South Africa, pointing to strong brand recognition, loyal customers and the potential of both its physical and digital channels.
“Our focus is on delivering a strong product, a compelling in-store experience and authentic local connections,” said Naidoo.
Business Times
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