China'S Market Becomes ZARA'S Biggest Profit Market

In the gloomy world economy and the European debt crisis, the unemployment rate in Spain is at 20%, but in the center of the storm.

The Inditex group, the parent company, has not been greatly affected. Its founder, Oman Ortega Theo, 76, has even become one of the few "beneficiaries" in the global crisis in.

Why is ZARA moving forward?

According to Bloomberg billionaire index, Inditex group's stock price has risen 32% this year, and Ortega's business has soared by 11 billion 400 million dollars. It has surpassed the US stock god Buffett (US $45 billion 700 million) for 46 billion 600 million dollars, becoming the third richest in the world.

Ortega was not the only one who got promoted.

In the Asian market, including China, for the first half of the year, the growth trend of retail sales in the whole year was weak, and the "Asian engine" that even drove the growth of luxury goods industry began to be powerless.

Zara is still a great success in China, and has been crowned as the king of fast fashion, the king of retail gold absorption, and even in the middle ring of Hongkong.

In central Hongkong, one of the most expensive commercial rentals in the world, Zara has just decided to drive away its old rival H&M, which has taken about two square meters of rent, that is, the price of HK $10 million 920 thousand per month, which has taken about 2800 square meters of shops. The highest monthly rent in Central has been HK $7 million of A&F, and Zara has overhaughten this record.

It is estimated that Zara will sell 5 pieces worth HK $300 per minute to maintain profitability at this level of rent.

China: the most profitable market

The bottom line of Zara is that it is one of the highest retailers in China's retail sector (average annual sales per square metre), with an average effect of 4179 euros.

4 times the enterprise.

And Zara is willing to invest so much, because in Ortega's eyes, China is still one of the engines of Zara's high growth.

In the past earnings conference, he announced that Inditex's 8 brands now have 275 stores in China and will continue to expand rapidly in China this year.

The sales volume of the entire Chinese market even surpassed that of the US market. In the first 5 months of this year, Zara opened 11 new stores in China, far exceeding 4 in the same period last year.

Driven by the Chinese market, Inditex group achieved a net profit of 432 million euros in the 2~4 quarter of this year, an increase of 30% over the same period last year, which is the 12 consecutive quarter of the group's growth.

Online shop turnover super entity store

Now, ZARA launches online stores in China this autumn.

You know, since Zara launched online stores in Europe in September 2010, online sales have exceeded the performance of its best physical stores.

The Zara online store has a daily turnover of 500 thousand ~60 million, which is almost 3 times the average of a physical store.

Introducing online stores to China, Zara can test the three or four line market, which includes a large number of Midwestern cities, which is not the focus of Zara stores.

It's not just Zara.

This year, some second-class luxury goods released in the growth of slowing earnings report, including H&M,

Many fast fashion companies, however, can still maintain strong growth of two figures.

Last year, Lang Xianping, a famous economist, predicted that China's consumption will be M shaped in the future, which means that more than 80% of the consumers are mainly concentrated in the low-end areas, while the other 20% will concentrate on high-end luxury goods consumption.

And the fast fashion brands represented by Zara will obviously be the beneficiaries of this trend.