Some domestic brands such as Meterbonwe, Nuoqi, and Peacebird have tried to enter China’s fast fashion market, but still, need much more improvement in their business models and supply chain management. Fast fashion requires high quality, trendy designs, quick delivery, and inexpensive prices. Zara’s refined model has satisfied those requirements, with a strong design team and efficient global supply chain, but is not easily replicated by Chinese brands that have always sourced domestically.
As international fast fashion brands in China continue their strong growth, they are changing the landscape of the country’s commercial real estate sector. That brands that are succeeding in China are those who localize to the sales methods, sizing and fashion.
Zara: Speeding up e-commerce delivery in China
Zara, owned by Inditex, entered China in 2006 and has quickly risen to become the fourth highest selling brands in apparel and footwear. Inditex has 514 fashion stores in China and makes 7% of its sales here. The company represented 2.2% of all retail values, up from 1.7% in 2011. Realizing the importance of e-commerce, Zara opened a flagship store on Tmall.com in 2014 and operated its own Zara.cn website. However Zara’s China strategy hasn’t been without difficulty, in 2017 it closed its largest flagship store in Chengdu. In 2019, Inditex had over 600 stores in China, but this number is slowly declining. To combat this decline, Zara is planning on increasing its power in China by creating more in-store experiences and faster deliver. By partnering with JD.com, Zara will have one-day delivery in China, and plans to reduce it to same-day delivery in major cities. While other fast-fashion brands in China are focusing on co-branding, Zara is capitalizing on quick delivery.
Topshop: Withdrew in 2018
Topshop is a British high-street brand with prices comparable to that of Zara’s. It first opened a flagship store in Hong Kong in June 2013. Unlike Zara and H&M, however, Topshop chose to forgo opening a physical store first in China. It first launched an online shop on Shangping.com, a leading Internet retailer, to test the increasingly competitive market. It later opened up its first fashion store in China (Beijing) in August 2015. Topshop withdrew from China in 2018.
H&M: Experimental with co-branding
H&M entered China in 2007 is now the third largest brand in terms of sales in the fast fashion industry in China. Its parent company represented 1.7% of all retail values, up from 0.9% in 2011. H&M has saturated the first-tier cities, and CEO Tadashi Yanhai wants to expand into second and third-tier cities in China and eventually reach 3000 fashion stores in China. The company already has 299 stores and opened 91 stores in fiscal 2015. It planned to open up 70 new stores in 2016. Competition in large cities is fierce, but H&M is ahead of the competition in expanding to cities where similar brands are not yet. In 2019, China now accounts for 5% of H&M’s sales. Similar to Uniqlo, H&M has launched co-branded products with brands like VERSACE, Balmain, Isabel Marant, etc. The H&M and Moschino collaboration in 2018 received a lot of exposure, however H&M’s co-branded products have become less popular since the collaboration with Alexander Wang in 2014.
New Look exited China in 2018 and closed all 120 store locations in China. During its time in China, New Look remained a minor player, but the British brand had grand ambitions to expand in China. The CEO Anders Kristiansen is optimistic about the competitive Chinese market, stating, “This is a great story of a British brand which has been successful in China. There is an appetite for British fashion there.” However, due to lack of proper localization and increasing domestic competition, the British brand withdrew from China.
GAP: Collaborating with KOLs and youth culture
At the end of 2018, GAP had 170 store location in Mainland China, Taiwan and Hong Kong combined. However, is suffering from the same identity and branding issues it has in Western markets. Though it ran an advertising campaign featuring the Chinese idol Luhan to give the brand a more youthful feel to attract Chinese women. GAP’s share of retail values has increased from 0.2% in 2011 to 0.5% in 2015. In 2019, GAP collaborated with Strawberry music festival in China, in another attempt to attract a more youthful crowd.
Uniqlo: The leader of fast fashion in China
Uniqlo is one of the success stories in China’s fast fashion market. In 2018, 25% of Uniqlo’s sales came from China, with sales increasing by 16% from 2017 to 2018. Uniqlo is known for its simple and comfortable clothing providing more reliable basics rather than a constantly changing inventory. It is cited that one reason for Uniqlo’s success in China is due to the fact that you always know what to expect when entering a Uniqlo, making it a good option for both professional and casual basics available in many different colors, making it easy to keep long-term buyers. Whereas many fast fashion brands focus on women’s apparel, Uniqlo also has high sales for men and children, according to Tmall’s sales, about half of the top selling products are men’s .
In terms of marketing, Uniqlo has recently made bold moves in China. In early 2019, Uniqlo collaborated with the designer KAWS to release an exclusive clothing series. Co-branding and similar collaborations are increasingly common in China, and it is one way to show Chinese consumers the brand understands and embraces their interests. Uniqlo has also started endeavours in new retail, with a new ‘buy online, pick up in store’ policy integrated with Tmall, which was launched in 2016 for a seamless shopping experience.
For more information, please pay attention to International Fashion Fair.