DHL Speed Up &Nbsp; Domestic Fast Fashion Brand Opportunities And Challenges Coexist.

DHL announced recently that it will increase investment in China's fashion and apparel logistics industry. It may be just the beginning. Other global air cargo giants will follow up DHL's initiatives to set up an estimated $7 billion 500 million in China's fashion and apparel logistics industry.

These air cargo giants will provide faster product distribution for China's fast fashion brands and even China's processing links in the global fast fashion industry.

In the past, due to the weakness in this area, such as the first tier air cargo giant did not set up a special clothing distribution center in mainland China, China's fast fashion industry has been faced with high shipping costs and no regulation.

At present, shipping giants such as DHL plan to set up fashion and garment centers in Shanghai, will speed up the logistics of China's fast fashion brands and reduce shipping costs. This will undoubtedly provide an important help for the development of fast fashion brands in China, and it will also squeeze out small and medium speed clothing brands whose product design cycle is not fast and is still in the "nurturing stage".

DHL speed up

DHL announced in early June this year that it will increase investment in China's fashion and apparel logistics industry. Specific measures include strengthening supply chain solutions, infrastructure construction and human resources allocation.

Most notably, DHL will build a new fashion and clothing distribution center in Jiuting, Songjiang District, Shanghai before the end of 2010.

The garment distribution center will be the seventh professional fashion and clothing distribution center established in the Asia Pacific region since DHL2009. It is also the first professional clothing distribution center in the mainland of China.

Its completion means that it will provide a larger and cheaper air cargo service for the domestic garment industry, reduce the cost of fast shipping goods by individual clothing brands, and enhance the operation period of domestic fast fashion brands.

Liang Qiyuan, chief executive of DHL global freight logistics (Hongkong) North Asia Pacific, has previously indicated that China's fashion and clothing market is undergoing a fundamental pformation. DHL's investment in China's fashion and clothing industry is just the same as the pformation of China's clothing retailing industry. "The size of China's fashion and clothing market in 2009 is $305 billion, and it will maintain a compound annual growth rate of 21% until 2014.

At present, China's rapid urbanization process will continue to expand the market potential of fashion retailers, and these retailers are also facing a sharp reduction in product cycle and fierce competition from important procurement bases in South Asia. China's apparel industry urgently needs to upgrade the overall level of garment logistics chain.

Huang Guozhe, chief executive of the Chinese company, further explained some changes in the Chinese market they valued.

"Some big clothing brands are buying retailers and sales channels in the local market.

The expansion of retail industry needs new supply chain mode, so it is very necessary to establish distribution centers in China.

Huang Guozhe said, "in response to this growth demand, DHL has expanded the storage and distribution network in China's first tier cities, and is going deep into the two or three tier cities, and will continue to increase investment in this area in the future."

For DHL, the biggest change of China's clothing retail market is that the national fast selling brand has been formed. These large number of direct network brands need to pport their latest styles and garments to all parts of the country for the first time. This directly constitutes the market basis for the establishment of DHL professional clothing distribution center.

Market integration begins

Along with the DHL scale development of domestic apparel shipping distribution business, there is also a global "fast start" of the global fast fashion brand giants in China.

At present, among the four fast fashion brands in the world, apart from the fact that the US GAP has not set foot in the Chinese market, 3 other retail outlets in China have been fully developed.

For example, H&M has opened 27 branches in China by the end of last year, H&M.

These stores have brought considerable sales to H&M, with a total sales volume of 1 billion 614 million kronor, an increase of 83% compared to the same period last year, which is second only to the Japanese market in Asia.

It was only in April 2007 that China settled in China. H&M, which opened its first store in Shanghai, has become one of the most competitive fast fashion brands in China. It is not just performance. In the market layout, H&M has begun to move forward to the two or three line market in China from the "stability" of the domestic first tier market.

In the second tier cities of Nanjing and Wuxi, H&M's stores have already been put into operation.

Meanwhile, according to the H&M announcement, in 2010, H&M plans to open 240 stores in the world, of which China is the focus of the plan.

Many booksellers believe that the number of shops in China will grow by two digits in H&M2010, most of which will be opened to China's "hinterland" outside the first tier cities.

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"The opening rate of H&M in 2009 has nearly doubled compared with the same period last year, so there is reason to believe that the recovery of the economy will prompt H&M to open more stores."

Analysts said, "taking into account the current number of H&M outlets in the domestic first tier cities is enough, and has begun to enter the second tier cities in China, H&M will definitely focus on the layout of the new two or three tier market in the future."

At the moment, the expansion of H&M to the hinterland of China is closely related to the progress of DHL in the apparel shipping business.

The link between them is that a national fast fashion brand requires a high standard and more economical logistics distribution system.

Because of the characteristics of fast fashion brands such as "parity" and "shortest loading cycle", the scale of cheap shipping business is required.

At the same time, this link may also mean the improvement of the threshold and the tightening of the fast selling clothing market.

DHL, which specializes in expanding the distribution network of China's first tier cities in the apparel industry and is moving deeper into the two or three tier cities, has actually accelerated the pace of the nationwide expansion of the fast fashion brands, and partly squeezed out the survival space of those domestic brands that have just come into contact with the concept of fast fashion.

Because of the existence of professional clothing shipping distribution centers, lower pport costs and more timely distribution will make the national fast selling brand easier to set up branches, maintain the unified fast loading cycle of various stores, and relatively cheap pportation costs.

Especially for brands that are outstanding in clothing design and production capacity, the "speed up" from the logistics sector will make them faster and more "parity".

This means that competition for domestic fast fashion brands will be more intense.

Related analysts said: "clothing sales in the first two years is still the blue ocean in the clothing market. Many domestic brands are trying hard to claim that they are China's first fast fashion brand.

However, in just a few years, the market has become more intense.

"DHL is just beginning. After it has increased its investment in garment logistics industry, there will be more global shipping companies concerned about the domestic field. This indicates that a large number of fast selling brands, especially the national fast selling brands, have emerged and the market is beginning to take shape."

"On the other hand, the construction of the new logistics platform also means the beginning of market integration," the source said. "The fast selling brands that have been established soon are hard to say that they are short of competitors. They will face greater pressure to survive."

Because the scale of the low-cost shipping and logistics system will bring national competition to these brands. With the help of the new system, the ability and cost of the national fast selling brand to expand the market will be more competitive, and they will suddenly appear before the small and medium sale brand that has not yet got the initial accumulation.