Fast Fashion Brands Will Launch Price Wars, Zara Price Cuts And H&M Competition.

　　 Zara Start implementing price reduction measures in India to enhance competitiveness

Spain's fast fashion giant Inditex group's Zara is starting to cut prices. According to India market sources, Zara cut prices by 10% to 12% in the past year to better compete with H&M, a fast fashion retailer in India. The commodity price of H&M, Sweden's fast fashion giant H&M, is about 150 rupees, which is about 22 dollars, while Zara's commodity price starts at 33 rupees.

Although Zara has been developing rapidly in India market in recent years, its revenue exceeds one hundred million US dollars. Clothing brand Its number of stores is around 100, but the growth in turnover has shown signs of slowing down. According to the 2015 Trent annual report, the turnover of Zara India market dropped by 23%.

In early April, Ryui Masa, chairman and CEO of fast fashion UNIQLO's parent group, said the data in the first half of the year were disappointing. Ryui Masa said: "consumers do not agree that new products are equal to high prices. The environment of fashion retailing is now very difficult. It is a mistake for companies to raise prices in this environment. There is evidence that consumer confidence is worse than we think. "

Zara is not the first fast fashion brand to cut prices, nor will it be the last one. In August 1st last year, Muji began to cut 20% of the more than 260 categories of goods in China, with the aim of further expanding consumption through price advantage. At the end of March this year, Spain's fast fashion Mango announced its price cut for its leisure series, a decline of about 15%, while UNIQLO's cartoon and print design t-shirt series UT, which was released last summer, reduced prices in the form of as low as 39-79 yuan in disguised price cuts, while H&M increased its cost performance by attracting cross-border cooperation.

Test the water price in India market?

Despite the global economic slowdown, emerging markets, including China and India, have been projected in the spotlight for the past few years as an important source of growth for fashion brands. Recently, a report published by Euromonitor International predicted that the luxury industry in India will grow by 86% between 2013 and 2018, faster than China, Malaysia and Indonesia. Like fast fashion in the western market and a popular era, India has also proved to be an attractive new market for fast fashion brands in recent years.

As the second largest market in the world after China, fashion retailing is booming. According to the news, although low fuel costs have caused difficulties for many economies, this problem has had a positive impact on inflation in India and brought about economic growth. There are 300 million Internet users in India. They are loyal fans of mobile terminals. This makes e-commerce a magic weapon for clothing and accessories brands such as Zara, H&M and Forever 21, and brands have set up e-commerce websites in India market.

The more favorable news is that according to analysts, the blowout development from the early stage of the Chinese market can prove that India's online luxury market is not yet very competitive and has great potential. Of the top 500 leading global luxury brands, only 30% have related businesses in India. In contrast, China's regional brand investment accounted for 70%. In the booming urban economy, the expanding middle class, favorable regulatory environment and foreign direct investment policy, India is the ideal hotbed for the development of fashion business.

Some analysts point out that global fashion brands, whether or not Luxury goods All of them are actively expanding, hoping to occupy the India market. However, measures to reduce Zara prices prove that fashion retail competition is becoming fierce.

As to whether the measures to reduce Zara prices will soon appear in these markets such as China and the United States, a spokeswoman for Zara's parent company Inditex said: "Inditex group's price setting behavior for products is independent in every country's market, so that their business positioning can be relatively consistent, and high-quality products can win the retail price that meets the requirements. In this sense, the Zara price policy will remain stable in the 90 markets.

However, analysts say that the price reduction measures taken by Zara in the India market may be a test of the price adjustment of emerging market products including China. Inditex group's fast fashion brand Zara entered China in 2006, with more than 500 stores in China. The rapid growth of fast fashion has begun to show signs of fatigue. Brands are considering adjusting their product structure. In China, with the fast fashion market becoming more and more saturated, fast fashion is showing signs of price war in order to maintain high growth performance.