Fashion Has No Time Difference, And Fast Fashion Shoes And Clothing Brands Are On The Way To The City

When H&M first entered China's first and second tier cities such as Beijing, Tianjin, Changsha, Hefei, and Chongqing, it was greeted by the long queues of Chaozhou people and petty bourgeoisie. What the "queuing parties" are looking forward to is not clothes, but the fashion that has no time difference with Europe.

In just a few years, fast fashion Footwear Brands have quickly captured the hearts of urban white-collar workers with fashionable, fresh, relatively low prices and open and relaxed shopping environment. Brands such as ZARA, H&M, C&A, GAP, Uniqlo, etc. have swept the business circles of China's first tier cities. Last year, fast fashion brands showed a trend of rapid development. The number of stores in China continued to grow rapidly, with an obvious trend towards second and third tier cities. According to the latest statistics of authoritative institutions, the proportion of new stores opened by ZARA and H&M in second and third tier cities in 2011 was 82.8% and 83.9% respectively.

In addition, internationally renowned sports brands are also increasing their exploration of China's second and third tier cities. As early as 2010, Nike China and Adidas China have released their five-year plans for the future, both of which said that they would increase the development of the secondary and tertiary markets in the next five years.

It is certain that China's second and third tier markets will be the focus of future competition among major foreign investment brands.

　　 Edge of subsidence

Almost all multinational companies have landed in China from Beijing, Shanghai, Guangzhou and other first tier cities with relatively strong consumption capacity. Since then, the first tier cities have also been their main battlefields. After years of layout and promotion, international brands have established themselves in first tier cities. However, in recent years, with the continuous development of first tier cities, the growth rate of foreign brand market has slowed down. In particular, sports brands have entered a cooling period after experiencing the increasing sales brought by the 2008 Olympic Games. In order to reach the increasing sales target year by year, international brands such as Nike and Adidas have to ask for markets from second and third tier cities. At the same time, local brands such as Li Ning, Anta, Septwolves and Lilang are also trying to enter the first tier cities that originally belonged to foreign investment while consolidating the original second tier and third tier cities.

The development of the first tier cities encountered bottlenecks, and the market was gradually diluted, prompting international brands to sink to China's second and third tier cities to continue opening stores. With the continuous acceleration of China's urbanization level and urbanization process, small and medium-sized cities will usher in a new round of rapid development in the next 10 years, 20 years and 30 years, and the purchasing power of consumers in small and medium-sized cities will be further released. A magazine predicted that by 2020, 66% of China's middle-income consumers will come from a large number of small and medium-sized cities. Such a broad market is enough to move all brands.

　　 The way of sinking

International brands have sunk into channels, but their steps and paths are different. In fact, the channel battle of international sports brands in China's second - and third tier cities started two or three years ago. Charles Denson, president of Nike brand, said on the conference call in fiscal year 2010 that the company would launch low-end products at different prices to enter the second, third and even fourth tier cities in China. With the strategy of price reduction and the expansion of channel merchants, international sports brands have opened stores in second and third tier cities. Now in small and medium-sized cities, there is no shortage of these big brands. According to media reports, on June 5 this year, Nike's official flagship store settled in Tmall (Weibo) Mall. Then came the news that Nike would launch its first and limited edition sports shoes and clothing in Tmall, which attracted wide attention in the industry.

So far, nine of the world's top ten sports brands have entered Tmall to open official flagship stores. In addition to Nike, the other eight are Adidas, Puma Puma, Reebok, Fila Fila, Mizuno Mizuno, Kappa, Diadora Diadonna and Lotto. Some people speculate that international sports brands will seize the second and third tier markets through e-commerce. However, Han Buyong, the executive vice president and brand planning expert of a clothing company, believes that the big brands will not rely on e-commerce channels to improve their performance. The development of e-commerce is just to support the brand image and better interact with consumers. As for the strategic position of e-commerce in the sinking channels of international sports brands, it remains to be seen.

The channel sinking of fast fashion brands is another scene. Han Buyong pointed out that the channel sinking of fast fashion brands is not as deep and far as that of sports brands. They only entered the second and third tier cities last year. The total number of fast fashion brands' stores in China is not too many. According to the data of last year, there are 97 stores of ZARA in China, 77 H&M stores and 123 Uniqlo stores. They continue to seize the market of first tier cities. Han Buyong believes that the large-scale channel of fast fashion brands should sink 3-5 years later.

In addition, among the eight fast fashion brands entering the Chinese mainland, only GAP, WE and Uniqlo have opened flagship stores in Tmall. The main way for fast fashion brands to sink is to expand stores. Moreover, different from the channel expansion mode in which sports brands rely on franchisees and agents, fast fashion brands have swept the first tier cities by opening direct "big stores", and they still apply the experience of "big stores" when entering the second and third tier cities. This is determined by fast fashion's high demand for the response speed of the supply chain. Only by opening a direct store can we firmly control the terminal. If the franchise or agency mode is adopted, the reaction speed of the whole chain will be greatly reduced.

Industry insiders said that opening a "big store" is not only to solve the direct marketing channel, but also to lay a brand foundation for the channel to join. The location and area of "big stores" have even greater influence on the brand than regional advertising. Therefore, "big stores" will become a development trend of enterprise terminal form. {page_break}

　　 Sinking trap

The manager of a first-line brand said that a careful study of the development path of local brands and foreign brands will find a very interesting phenomenon. The development path of foreign brands and local brands is just opposite. "The domestic brands follow the mass line from bottom to top, first gaining the recognition and trust of the grassroots people, and then going to the first tier cities to deal with the urban people in big cities; while the international brands follow the leadership line from top to bottom, by first dealing with the first tier cities, and then with the influence of the first tier market, we can deal with the second tier and third tier cities at the first tier."

At present, foreign brands are sinking into second - and third tier cities, which will undoubtedly face off with local brands. Domestic brands, such as Seven Wolves, Lilang, Anta, 361 degrees, PEAK, Tebu, Metersbonway, Yichun, Sima, etc., have grown up relying on the vast second and third tier markets. These brands have grown up, and their stores are all over the country, especially in the second and third tier cities and even the fourth tier cities. There are floor stores in all major commercial streets and department stores in prefecture level cities and counties in all provinces of the country. In the second and third tier markets, they took the lead by virtue of years of development, which hindered the market of foreign brand food sharing.

Industry insiders believe that price is still the decisive factor influencing international sports brands to enter the domestic second and third tier markets. For consumers in second and third tier cities with high price sensitivity, the price of international sports brands is still high. At present, the most adaptable price in the second and third tier markets is between 170-250 yuan, and even Nike's low-cost products are sold at 300-400 yuan in China.

As for the difficulty of fast fashion brand's channel sinking, Han Buyong believes that there are still significant differences between the consumption habits of second and third tier cities and consumers in first tier cities, and their consumption characteristics have more obvious regional differences and diversification characteristics, which are more difficult to grasp. In addition, they are relatively less affected by world fashion trends, and their understanding and acceptance of fashion are also very different from consumers in first tier cities. Therefore, the current sinking of fast fashion brand channels may be difficult to connect with the local atmosphere of second tier and third tier cities.

In addition, although the "big store" strategy of fast fashion brands does not have any incongruity in the first tier cities, in China's second and third tier cities, the region is vast, the process management will be more difficult, and the investment of human and material resources will be greater, which has to be said to be a great challenge.