"A lot of our rivals have already begun paying directly in yuan," H&M's head of investor relations Nils Vinge told the Wall Street Journal.
While most of the clothes sold in H&M's shops are produced and purchased in Asia, about 80 percent of the transactions are denominated in US dollars.
According to Vinge, the dollar-euro exchange rate is "very important" to the Swedish retailer as 60 percent of H&M's clothes are sold in euros or currencies tied to the euro.
With the dollar showing signs of strengthening against the euro, H&M has been mulling making purchases directly in yuan rather than dollars.
Vinge emphasized that while developments with the yuan were "very exciting", using the currency can still be expensive.
"It is not written in stone in which currency we'll buy in," he told the Wall Street Journal.
"We want the best and simplest option, and the option that carries the least risk for us and our suppliers."
News of H&M's possible move to the Chinese currency came as the company reported a 22.5 percent increase in second quarter profits.
The company's reported 5.22 billion kronor ($746 million) net profit handily beat expectations of analysts polled by the Dow Jones Newswires, who had anticipated a net profit of 4.84 billion kronor for the quarter.
H&M also reported a 15 percent jump in second quarter sales, to 31.66 billion kronor from 27.63 billion during the same period a year earlier.