The “safe bet” of H&M – A proof that serious projects have ground to grow in Romania

This month the Romanian fashion retail market changes for good. The Swedish giant H&M opens its first two stores this week, after a careful campaign and a serious investment. The majority of my Romanian friends are excited about the news and I am sure that the company will reach record numbers in visitors and sales during the upcoming weekend.

Why it is important for Romania

H&M is the first major retailer who “bets in Romania” during 2011. They don’t just open a store here, but they have reserved 6 and probably another 4! So, we talk about a major investment, taken by an international fashion retailer with vast experience in tens of countries.

This is an important move for Romania too. We need new investments like this, because they:

• Provide to the country the obvious economic figures: People being hired, investments, taxes paid etc.
• Expand the clients’ range of options, initiating healthy competition.
• Show trust to the country.
• Will be used as case studies by the next retailers to come.

Why many foreign retailers will keep an eye on H&M Romanian quest

Be sure that many international players will have their eyes wide open, to check what H&M will achieve to do in Romania. This is due to many different reasons:

• Romania exits a really difficult period, with retailers having been involved in many problems and challenges.
• H&M seems to offer exactly what Romanian consumers want: “good quality at attractive prices”. Its success (or not) will influence many other people’s decisions.
• Also the Swedish appear to have made “everything in the right way”.

Their success will determine the next players’ steps. A failure will create a major question mark and will practically block the majority of expansion plans for couple of years at least.

A very good strategy – a “safe bet”

I consider that H&M has organized a very good strategy in order to enter in Romania. They have proceeded in the following steps. They:

• Studied the market for some years.
• Conducted market surveys, in order to identify what exactly people want.
• Chose to enter in the market after the crisis started. Result: Everything was cheaper and easier for them. Lower costs, more choices, maximum flexibility.
• Picked the top locations in all established retail projects, paying for them much less than they would have paid in the past.
• Announced their entrance in Romania last year and maintained the news for quite some time. Too many projects appeared to host “the first store of H&M in Romania”, while the company benefited from free exposure.
• Created the feeling of anxiety to Romanian consumers, starting with Bucharest. This is the first time that people heard so many things about a retailer they already know (Romanians travel a lot). Their curiosity is at maximum.

The whole strategy looks very carefully designed and the success is almost sure. This is one of the “safest bets” I have ever seen during my 7 years in Romania.

A proof that serious projects have ground to grow in Romania

I keep on telling you that this country has great potential, only once you respect it, structuring your business with a professional approach. The times of “smart smechers” who trick the others, steal money and run are gone. Especially in modern segments of economy, like retail, you need to be very competitive if you want to succeed.

On the other hand, if you are a retailer and you come to Romania in order to check the market, you will talk with 100 people and most of them will talk bad about the market’s potential. For them the only approach should be “easy, fast money”. This is why I have surprisingly noticed that even major multinational companies came in this country without following their international approach, ending up to failure (usually).

H&M project shows that if we respect Romania and its potential, we can really achieve great things. This does not mean that we will accept anything that people tell us, nor that we will reject it in advance. But with careful study and moves, the successful result can be reached in Romania much easier than in other countries. And the country still has lots of ground of growth.

The Swedish showed us that serious projects can succeed in Romania. My respect.

What is your opinion?