Zara Enters Korea Or Loses Too Much Because Of Its High Price.

Although the European market is relatively cheap, the main market still has a premium of more than 20% compared to the Spanish market. The largest single market of Zara, the German market, is 124% of the Spanish market price. The German market price is the same as that of the Italy market, even though the French market price closest to the Spanish market price is 22% higher than that of Zara in the domestic market.

The circulation of Spanish is rather slow. A report on the global pricing of Zara products was first reported by the local media El Confidencial in June 3rd. It was not until more than 10 days later that the Korean and English media followed up in the last two weeks. However, the Zara, which was born in Spain, swept the world by its flagship product of the first fashion group, and its fast fashion and logistics speed were much faster than that of Spanish news.

El Confidencial quotes the research data of Morgan Morgan and Stanley Research Institute AlphaWise, which is based on the 7000 products of the 14 main markets in the world's 7000 main markets, ranking the price of Zara Zara in the world's major markets, which is based on the price of Zara products in the Spanish market, which is priced at 1.

Data show that Zara is the most expensive price in Korea, which is 195% of the Spanish market price, that is, almost two times the price of the Spanish market. Surprisingly, the US market is also selling at the same high price, which is 192% of the price in the Spanish market, and also close to two times. The Chinese market is 178% of the Spanish market price, Russia is the 176% price of the Spanish market, the Japanese market is 162% of the Spanish market price, and the India market is 153% of the Spanish market price.

For Da Mo and AlphaWise "South Korea's most expensive" Research Report, South Korean media Yonhap News verified Zara Korea Companies Zara Retail Korea, the company declined to comment.

However, the situation of Zara in the Korean market is going from bad to worse. Zara entered the Korean market in 2007. As of 2012, the sales growth in the market was only 20%. The subsequent growth rate in 2013 and 2014 was lower than 11.5% and 4.6% respectively. In 2014, Korea Companies Zara was still in a state of loss, with a loss of 8 billion won, or about 7 million US dollars.

In the Korean market, Zara was originally exported to H&M, Uniqlo UNIQLO, and even Korean brand Eight Seconds, SPAO and Top Ten.

At present, Zara Retail Korea

The parent company Inditex SA and the Korean local retail giant Lotte Shopping Shopping (023530:KS) Lotte shopping joint venture, each holding 80% and 20% respectively.

As for the price of Zara, Tang Xiaotang, a retail industry analyst, said that this is a normal phenomenon, and the global price is abnormal. "Tariffs, excise taxes, local labor costs, logistics and even sales products decide the price of a single product or the average selling price is different".

Tang Xiaotang also said that in the fashion category, the prices of some products in Asia, South America and other countries are generally higher than those in European countries, which are mainly subject to heavy taxes and exchange rate effects.

Data show that as of the end of April, the first quarter of the year, Inditex SA's 8 brands have 6746 entities in 88 countries and regions in the world.

During the first quarter, the group added 63 new stores in 27 different markets, 10 more than the same period last year, 19 of which were Zara Home brand stores, accounting for nearly 1/3 of new stores, and 15 new stores opened by Zara.

The group also renovated and expanded flagship stores such as New York (Fifth Avenue, 2), Tokyo, Copenhagen, Belfast and Tel Aviv.

In terms of electronic commerce, the group plans to expand its e-commerce layout to 30 regional markets in Hongkong, Macao and Taiwan this autumn on the Zara online store.

Whether in the first quarter or the 2014 fiscal year?

SA has a strong performance. As of the end of April, the net profit of Inditex SA increased by 28.3%, the largest increase in more than two years. The net profit of the world's largest apparel retailer increased from 406 million euros last year to 521 million euros, exceeding the market expectation of 5.05-5.10 billion euros.

Core earnings EBITDA per year increased by 22.3% to 895 million euros, with a market forecast of 888 million euros.

Net sales totaled 4 billion 374 million euros, slightly higher than the 4 billion 330 million euros expected by the market, up 16.7% from 3 billion 748 million euros a year earlier, and 13% at the constant exchange rate.

Inditex SA capital market director Marcos L PEZ PEZ said that the first quarter performance was very strong.

Comparable sales in all regional markets have recorded positive growth.

After the two quarter, group growth increased slightly. From February 1st to June 7th, group net sales rose to 13.5% under the constant exchange rate.

In the 2014 fiscal year ended January 31, 2015, Inditex SA achieved a net profit of 2 billion 500 million euros, slightly higher than the 2 billion 490 million euros expected by the market and 2 billion 380 million euros in the 2013 fiscal year.

Profits before EBITDA interest rate depreciation and amortization increased by 4.5% to 4 billion 100 million euros, but EBITDA profit margins fell 90 basis points to 22.6%.

Gross margin also contracted by 100 basis points, down from 59.3% in the previous year to 58.3%.

In the 2014 fiscal year, net sales of Inditex SA totaled 18 billion 120 million euros, an increase of 8.3% over the previous year of 16 billion 720 million euros.

The same store sales including physical facade and online sales increased by 5%, compared with 3% in the 2013 fiscal year.

Although online sales are still small, their growth is strong, and the flagship brand Zara.com has more than 2 million 500 thousand daily visits, more than double that of three years ago. The website will increase online sales in three markets in Greater China, such as Hongkong, Macao and Taiwan this year.