Recently H&M announced that they will have a forthcoming collaboration with Balmain which is a well-known luxury brand and focus on high-end dress.
H&M as a fast-fashion brand always have the comparative advantage of good-quality but cheap clothes, the target customers of H&M are women around 16-35, and it is the favourite brand among the college female student including me. Balmain is a high-end brand and the target customers are people with higher salaries and more disposable income than H&M customers.
Such two different companies with different value propositions and customer segments, why would they decide to come out a forthcoming collaboration?
In my opinion, H&M decided to do that because the fantastic design and wonderful idea of Balmain; Balmain decided to do that because the broad market H&M has and the potential customers who couldn’t afford Balmain but can afford a little “expensive” H&M. Furthermore, the previous success of H&M x Alexander Wang gave both of them confidence that the clothes will be sold out immediately.
This cooperation between H&M and Balmain shows the win-win when two companies change their value proposition for catering to taste of majority customers.
Sources:
H&M and Balmain campaign
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