H&M lost China's trust in 2021 and never found a way back — 200 stores gone

In March 2021, H&M issued a statement that led to a massive consumer boycott in China. Chinese e-commerce platforms removed H&M products from search results, and the brand that had opened its first China store in 2007 saw its local business devastated. The boycott was immediate and severe: H&M China's sales fell about 40% in the three months following the incident.

Rather than recovering, H&M's position in China steadily eroded over the next five years. The brand was slow to adapt — it entered Tmall in 2018, nearly a decade after competitors like Uniqlo (2009) and Zara (2014). Its small-store format struggled against larger-format rivals, and its brand relevance among young Chinese consumers faded. Meanwhile, local fast-fashion players and domestic brands gained share.

By June 2026, H&M restructured its global organization, cutting Greater China from one of nine regional units to one of 26 market units under continental management. The local team lost about 40 positions — a quarter of its staff. China stores had shrunk from over 500 at their 2019 peak to about 300. Globally, H&M had 832 fewer stores than in 2019, and its market capitalization had roughly halved from its 2015 peak.