Zara And H&M Electricity Supplier War Is Imminent

Although H&M and Zara are still small in the market for electricity providers, they are all their main markets. If the two are involved in electricity suppliers, the market will account for about 75% of the total sales of the group.

H&M, which is more concentrated in the market, is expected to increase to 87% of its 13 major market share of electricity suppliers.

Compared with its industry status, its rival H&M is currently speaking as the main fast fashion brand Zara of the Spanish giant Inditex SA (ITX.MC), which has some advantages at present. Although H&M has already been involved in the online business in 1998, Zara has launched the electronic business business in 2012 only 12 years later. However, with the rapid reaction speed and expansion speed, Zara has already launched the electricity supplier business in 27 markets, accounting for 80 of its 1/3 market, while the earlier H&M that launched the e-commerce business now enjoys only 13 business in the 13 markets, accounting for less than 55 of its 55 markets.

Business, H&M is lagging behind Zara.

And the development of Zara online business is also inseparable from the characteristics of the two brands. Compared with Zara, H&M has certain advantages in terms of price and fashion, while Zara is in logistics.

The reaction speed is also unmatched by H&M.

However, the advantages and disadvantages of Zara and H&M will also be interchangeable. For example, H&M's low price and fashion can reduce inventory changes, but it will also reduce the profit margin of the e-commerce business. The fast logistics and supply of Zara mainly benefit from the European unified logistics and suppliers, but this will undoubtedly increase the cost.

Due to low price and immature logistics, H&M is now being delivered in Germany for 3-5 days, with a cost of 4.90 euro per unit, while Zara logistics costs only 3.95 euros, and provides 50 euro free logistics fee service.

Apart from brand characteristics, the gross margin of H&M Hennes & Mauritz AB group has been lower than that of Inditex SA group. Besides the low price and low gross margin, the advertising cost of H&M Hennes & Mauritz AB has always been higher than that of its competitors. According to analysts, the former advertising rate is as high as 3%-4%, while the latter is only 0.5%.

Although physical stores are now and will become the main channel for the life of large brand clothing retailers, the competition and contention of online channels is no doubt important. Not only because most retailers have already been able to subscribe to stores and pick up products through the click-and-collect website, but online revenue accounts for 20%, which is also the long-term goal of many apparel retailers. Therefore, for the faster fashion group, the new battleground has shifted from offline to online.