In The Pformation, H&M, ZARA And Other Fast Fashion Encounter New "Destroyers".

Recently, Spanish group Zara Inditex, the parent group of fast fashion brand, announced its 2018 financial year results. Data show that net profit rose by 2% to 3 billion 440 million euros in the group period, up 12% in local currency, which seems to be the most "bad" growth rate of the group in the past 5 years.

According to the report, group sales increased by 3% to 26 billion 100 million euros in fiscal year 2018, compared with sales growth of 4%, slower than the 9% sales in fiscal 2017, and the gross margin was 56.7%.

What is more alarming to the industry is a report submitted by the Inditex group to the local regulatory authorities.

According to the data, the rental cost of the group's operating entities increased by 1.4% to 2 billion 392 million euros last year, which is 10% of the total revenue.

As of January 31st, Inditex group has 7490 stores in 96 countries and regions around the world.

Obviously, the huge scale of physical stores has become the "biggest burden" in the pformation period of Zara.

H&M has also disclosed its first quarter results in 2019, with sales increased by 4% between the year and 51 billion kronor, or about 5 billion 490 million US dollars, at a fixed rate of 10%, slightly higher than market expectations.

However, several agencies have pointed out that the current H&M recovery is mainly due to the lower base of comparison in the same period last year, and wants to confirm the "recovery trend" faster, and more performance is needed to prove the good data.

UNIQLO, which was born in Japan, staged a new pattern in the 2018 fiscal year, that is, "the mainland is not enough, and the overseas is coming together".

The 2018 fiscal year report of the fast retailing group of UNIQLO parent shows that the overseas market (including greater China) has surpassed the Japanese market for the first time.

From the data point of view, the overseas market sales rose 26.6% to 896 billion 300 million yen in the same period, and operating profit rose 62.6% to 118 billion 800 million yen.

During the period, the proportion of UNIQLO's performance in the Chinese market reached 25%, and China became the world's second largest market of UNIQLO brand.

Gap, a fast fashion brand that once dominated the North American market, is increasingly showing signs of "giving up treatment." by the end of February this year, Gap group announced that it will split into two independent companies: one of them contains only OldNavy that has developed better in recent years, and the other has not yet been named, but it will include existing brands such as Gap, BananaRepublic and Athleta.

In the past two years, the fast fashion tycoons, who had always called themselves "quick wins", began to "low down" in the past two years, relying on spokesmen and cooperative stars to stir up topics and win attention.

In March, H&M announced that Zhang Yixing, the "versatile musician", became the spokesman for the menswear brand in Greater China. As early as last year, H&M had announced that Wang Yuan, a "superhuman Idol", became the spokesman of the brand new generation in China.

H&M said that the establishment of spokesperson is through continuous pursuit to enhance market competitiveness and brand influence.

In addition to signing spokesmen, H&M has also increased the proportion of Star Street filming and tide people cooperation in daily publicity campaigns for media and social networks.

This strategy seems to be doing well at the moment. At the end of March, Zhang Yixing released the single product Street patrolling "right way to greet spring". It forwarded more than 568 thousand on micro-blog, but the brand's ordinary type recommended micro-blog, the forwarding volume was basically very sad.

In September last year, Zara announced that Dongyu Zhou and Wu Lei became the brand ambassadors of Greater China and sold the same products at Tmall flagship store.

The number of fans of Dongyu Zhou and Wu Lei on micro-blog is 28 million 600 thousand and 37 million 750 thousand respectively. As the new generation of "little flowers" and "small fresh meat", they have a certain "carrying capacity" and many followers follow.

The "sudden love" of fast fashion brands for traffic stars is closely related to the change of consumer preferences.

Compared to luxury brands, the "millennial generation" accounts for a large proportion of the fast fashion brands today.

But some analysts believe that for fast fashion brands, traffic is a double-edged sword.

Traffic stars can bring goods, but they can also destroy a brand's big event, a new product release, or even shake the brand image.

Some analysts believe that high frequency and inexpensive fast fashion brands are "efficiency driven".

They are different from the "premium drive" of low frequency and high added value of traditional fashion brands.

Consumers choose fast fashion rather than brand value because of the product itself.

This explains why fast fashion does not need stars for a long time. Why does Zara without star strategy still win the sluggish retail market and open up the distance between H&M and UNIQLO, which are popular with star strategy.

A new report by Spotted, a market research firm, points out that fashion brands need to be more cautious in dealing with traffic stars and diversify their list of CO stars.

Moreover, this will bring more cost pressure to the fast fashion brand that wins the "good quality and low price".

Of course, no model can achieve absolute victory.

When this balance is broken, it means that the new "destroyer" appears.

With the development of new technology, fast fashion mode will inevitably become the object of reducing dimension.

For example, a group of European fashion business platforms known as "Ultra-Fashion" has not yet jumped out of the fast fashion business model, that is, consumers can enjoy the same or similar products at a lower price.

They are more focused on "fast" and are challenging the traditional fast fashion which is known for their immediate response to consumer demand and constantly bringing fresh ideas.

Boohoo, ASOS and Missguided in the UK are now able to produce goods in 2-4 weeks, Zara and H&M for 5 weeks, while traditional retailers need 6-9 months.

Missguided can launch 1000 new products every month and update the inventory once a day.

ASOS can also complete the product process within 2-8 weeks, with an average listing time of about 6 weeks.

These ultra fast fashion retailers avoid the inherent problems of traditional retailing, namely product shortages and overstock, and the consequent reduction in prices and profit margins.

The supply chain of ultra fast clothing retailers is always agile, able to quickly match inventory supply and changing demand, and strictly control inventory, and achieve a balance between insufficient supply and price reduction.

The preliminary design of the product is to conduct small batch production, test consumer feedback, and make quick replenishment if successful.

In China, the situation of fast fashion is becoming more and more complicated.

In addition to the rising domestic apparel brands, fast fashion's current competitors come from another battlefield, thousands of Taobao sellers.

This makes the middle and low end market competition unprecedented fragmentation.

When consumers' eyes become more and more critical, especially in the Chinese market, the original business model of fast fashion is also being overturned. Though starting to find celebrity endorsements, it can intermittently surprise consumers and stimulate consumption, but in the final analysis, it is still necessary to give play to the core competitiveness of commodities.