How Did The Zara Parent Company Enter The Market With A Market Value Exceeding LVMH?

Recently, according to Forbes's latest list of the world's richest men, Amancio Ortega, the boss of Inditex group, the second largest Zara parent company, has surpassed Bill Gate for the first time to become the world's richest man in the new world.

According to the real-time tracking tool of Forbes magazine,

The net wealth of the founder of fast selling brand Zara has soared with its stock holdings of Inditex group, which is now more than $79 billion 800 million, which is more than Gates.

It was not long before Gates regained the throne of the richest man.

The recent strong performance has further pushed up the group's share price, Amancio Ortega, and its chances of sitting on top of the world's richest.

In addition, the total wealth of Ortega is also in fashion circle.

This year's 79 year old founder, Amancio Ortega, has almost two times the private wealth of LVMH Group Chairman and chief executive Bernard Arnault.

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Many luxury brands.

ZAR parent Inditex group has more than 100 billion dollars in market capitalization and has successfully reached the market capitalization of only about 80 companies in the world.

This year, the company's market value has increased by 36%, far exceeding the market value of the world's largest luxury group LVMH.

Inditex group's brand also includes Massimo Dutti, Bershka and many other brands.

Benefiting from domestic market expansion, online sales growth and the weakness of the euro, promoting overseas tourists consumption, the company's share price has been developing steadily.

As of July 31st, including Zara, Pull&Bear, Bershka and other brands, Inditex group has 6777 stores, covering 88 countries, and brands have corresponding e-commerce sites to provide online shopping services.

The most profitable Zara now has more than 2000 shops in 56 countries and regions around the world.

Ortega has been a member of the board of directors since the Create Company began in 1975.

Ortega's first store is very small and is located in the northern coastal city of A Coruna, which is also where he lives.

For decades, he has been regarded as the founder of fast fashion.

The fast fashion growth momentum is strong, Inditex group profits in the first half of the year rose sharply, 26% months, the total profit was 1 billion 290 million dollars, half year, the fashion giant's stock price is double-digit increase.

In addition, the profits of Inditex group in the first half of the year exceeded the expected estimate. Recently, Jamie Merriman, an analyst at Bernstein, said that although the emerging market is full of challenges, the profit of the Inditex group in the second half of the year will continue to rise, and its position in the market will not be shaken.

Zara is undoubtedly the king of fast fashion.

In London, New York, Paris and Milan fashion week, the vast majority of participants will wear their latest brands at least.

As the luxury sector is weakening, high-end stores are also losing business.

Today, Zara and its competitors enjoy stronger bargaining power, requiring better shopping space and expanding rapidly in China.

Zara entered China in 2006, with more than 500 stores in China, and about 40 in 2014.

Statistics show that the whole fast fashion industry will benefit from the slowing economic situation.

Usually the market contraction will affect the intermediary business, but the acceleration and deceleration of China's economy seems to be conducive to the development of fast fashion.

In the future, nothing can stop fast fashion brands, and all Chinese shopping malls should cater for their needs.

Zara parent company's market value exceeds LVMH to enter 100 billion US dollar business camp. How did it do it?

New superspeed

Zara's internal design team can complete a project within three weeks.

These three weeks refer to the time from design to store.

According to the tradegecko.com survey, for the vast majority of companies, 100% of the next quarter's budget will be locked six months ahead of schedule, while Zara will lock 15% to 25% ahead of schedule.

At the beginning of the new quarter, the percentage will increase to 50% to 60%, which means that about 50% or 40% of the funds can be flexibly changed. If there is a new fashion trend in the season, Zara will be able to immediately follow up and complete the design and store work. This is something that other competitors can not do.

Similarly, if the product is unpopular, the company will be able to make changes in time or simply stop production.

In fact, 51% to 55% of Zara clothing is targeted at the needs of the "neighboring" market, such as Spain, Portugal, Turkey and Morocco, rather than Asia.

Paying attention to consumers' purchase behavior

Telegraph's Graham Ruddick found that when he visited Inditex headquarters in 2014, Zara was listening to consumers.

Store managers will send orders to headquarters at frequencies two times a week.

These orders include not only sales data, but also consumer feedback.

These orders will be completed within two days and will be shipped to the store (Monday and Thursday are new days. If you want to taste the first cup, you can't miss them).

Perfect online shopping experience

Zara.com is also the leader of fast fashion business. The website has multiple functions, making consumers' shopping experience relaxed and enjoyable.

The new product line is also two times a week, on Monday and Thursday respectively (and offline stores), so if you do not have Zara around your home, watching the official website is also a good choice.

In addition, the website also has a "store in store" query function. Orders over 50 euro can be delivered to the designated address or Zara store quickly and free. Unconditional return can be returned to the warehouse or back to the store (Paypal refund will be executed immediately).

If there is a shortage, the website can also provide an e-mail reminder service. Customers will immediately remind customers when they arrive.

In addition, the products purchased by customers will be wrapped in delicate and clean bags in the cartons provided by the brand, which will make you feel as if you have bought a high-end luxury product.

More choices for consumers to choose from.

Landing Zara.com, you will find that there are 64 different styles of pant pants (45 in the ladies' page, 19 in the low price, young pages), and various colors, materials, lengths, widths and waist lengths to choose from.

This is one of the keys for Zara to defeat its competitors: choice.

Suitable for people of all ages and styles.

Zara is really suitable for everyone.

Unlike many other fast fashion retailers, it does not put all their energy into the same fashion trend.

Although it is good at interpreting the latest Celine/Chloe/Givenchy style of each season, it will retain its "classic" products.

Consumers know that they can find Navy suits, pure silk shirts or cashmere collar clothes suitable for office wear in brand stores.

This means that Zara attracts the attention of all ages and all kinds of people. Some people are following the trend, some are not caught up with the trend, and Zara can give them what they want.

Fashion speed wins low price competition

In general, fashion brands sell products in the form of 2000 to 4000 a year, and ZARA launches more than 10 thousand new products every year. These new products are selected from over 40 thousand designs by its design team every year.

The huge number of new products is designed to cater for shorter product lifecycle.

If the performance of the first week is bad, it will be withdrawn immediately, and will no longer be added to production; if the sale is good, then the scheduled output will be completed in the next few weeks.

However, even the hot money will not stay in the shop for more than 4 weeks, which makes the customers dare not hesitate too much when they look at some clothes, because they may not see it in a few days.

Rapid product updates attract people to enter ZARA chain store again and again.

In Spain, for example, the average customer turnover rate of ordinary fashion stores is 3 times a year, while the frequency at ZARA is 17 times a year.