Competition no longer exists; it’s been replaced by collaborations.

H&M has changed its management philosophy, they have replaced the word “competition” with “collaboration”

H&M's website is being converted into a fashion marketplace.

Over 13 womenswear and 15 menswear labels will be added to nearly 20 existing labels in H&M’s ever-expanding brand portfolio.?

The rollout is starting in Sweden and Germany, with the intent to penetrate into more of the brand’s?54 existing?online markets.

Why the sudden change in strategy – to sell competitive merchandise and brands on the website.

As per a retail touch point study,?66 percent?of customers prefer to shop at online marketplaces rather than individual brands.?

For context, Amazon and Walmart surpassed?100,000?sellers on their online marketplaces back in 2021, while H&M is still closing in on 40.?

Online marketplaces aren’t an arena that brands and retailers can afford to overlook, as nearly half (48 percent) of online shoppers go straight to a marketplace to do their thing.

Few advantages.

Increased revenue is the #1 benefit of selling on an online marketplace.?

Brands that sell on a single online marketplace see a 190 percent jump in revenue over those that sell on just one channel.

Brands using online marketplaces also benefit from all of the consumer trust from the marketplace they’re selling on.

Marketplaces have built their reputations and people trust them.

Once you become known as the shopping destination for everything, purchasing becomes automatic.

Even if the #1 online behemoth is able to reap market share with all of the negative press, shipping delays, and worker shortages, it makes sense that more retailers are throwing their hats in the ring.

The leading?online marketplaces?in the U.S. are Amazon, eBay, Walmart, Etsy, and Target, respectively.

To put the current success of online marketplace sales into context, Amazon’s online sales now comprise?34.5 percent?of all eCommerce fashion sales. Amazon has been building up its private-label offering in addition to hosting competing brands.?

For every item sold on Amazon, the marketplace takes a referral fee that falls somewhere between 8 to 15 percent.

Facts that cannot be ignored:

Marketplaces grew at?2x the rate?of general e-commerce growth last year.?

Price is currently a differentiator for many customers out of necessity.?

Fashion brands are driven by excitement fueled by the feeling of being a trend setter and in sync with the fashion quotient.

H&M is all about trends.

?Labels currently hosted under “H&M with Friends” include easily identifiable classic denim labels like Lee and Wrangler. You’ll also find heavy hitters like Fila, Superdry, Crocs, Kangol, and Buffalo.

Way forward to small fashion startups:

Start by creating partnerships that bridge the gaps in your existing offerings, then watch as your brand presence evolves.

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