Market Competition Is Extremely Grim: What Can H&M And Zara Rely On Over Their Peers?

As a fast fashion representative brand, Zara and H&M always win at a speed. Whenever a big trend comes up in the four fashion week, people will soon find similar or even identical products in their stores.

In this regard, last year, the Wall Street journal once reported that an overcoat produced by Zara is only 25 days from the design, production, and delivery to the flagship store in Fifth Avenue.

But now, according to Goldman Sachs's latest research, the speed records of Zara and H&M have been broken by other fast fashion brands.

The report says that the fashion brands including ASOS and Boohoo are shorter than Zara and H&M from conception, design, production to new ones.

Goldman Sachs studied the two variables of supply chain time consumption and sales growth, and found that "time is money". The advantages of two brands' high-speed operation have been pformed into revenue growth, because once the brand can respond quickly to market demand, it means that it can make reasonable arrangements for inventory and reduce the probability of unsalable sales.

Japan's fast fashion representative, UNIQLO, has recently gamble on its speed. Ryui Masa, the founder of the company, said in an interview that the company plans to reduce the design to the delivery room to 13 days.

"We must immediately introduce clothes that customers are anxious to buy, which is why fast marketing is named."

He added.

The speed of ASOS is very frightening - up to 4500 new products per week.

Just a few days ago, it raised the expected growth in the new fiscal year: from 25%-30% to 30%-35%.

Boohoo is also the case. The online fashion company, which recently made an offer to Nasty Gal, launched nearly 100 single products a day.

Simon Bowler, a bank analyst in Paris, France, found that Boohoo spends almost half of the total time it takes to design new products from one to two weeks in a week or two. "They can launch new products ready for sale next week in a week," he said.

As for the millennial generation who love the old, they just turn on the computer.

If you spend ten or twenty pounds, you can buy a baseball jersey or a dress.

According to the latest report released by Boohoo, the company expects an increase of 50% over the same period this year.

Although the brand name sounds very healthy, its stock price grew obviously last year, and the market value of the company has exceeded 500 million US dollars.

The electricity supplier's nature of the two companies pave the way for the high-speed operation of the brand. At the same time, they have escaped the risk of physical store saturation.

Compared with the early Zara and H&M stores in the world, they are now undergoing gradual pformation, because their ability to absorb gold is decreasing.

Take H&M as an example. It opens 4300 stores every year with the expansion speed of 10%-15%, and also makes the chairman of the company become the richest person in Sweden. With the increase of sales under the line, the fast fashion brand of the old generation slows down the opening speed of the entity shop and increases the investment of online business.

Aware of its backwardness, H&M recently decided to invest in the supply chain.

In order to control production costs and eventually come to market at competitive prices, at present, 4/5 of the brand's production lines are located in Asia, but it is considering shifting to places closer to the European continent, such as Turkey.

"In this case, the time of delivery of goods to the European market will be greatly reduced."

H&M chief executive Karl-Johan Persson said in an interview with Reuters.

From H&M first quarter figures, both revenue and profit after tax are lower than expected.

Anne Critchlow, an analyst at Societe Generale, France, stressed that group inventories rose by 30% over the same period last year.

To this end, H&M is currently adjusting the supply chain system to enhance its response to weather, market environment and other factors.

There are also J.C. Penney and Gap.

To speed up, the two fashion brands coincidentally reduced their dependence on productivity in Asia - part of the production line of Gap has been pferred to the Caribbean, and the design process has also been simplified, for example, when necessary, the company will determine the design draft and enter the production stage within 24 hours.

Whether it's trying to buy luxury brands, or constantly optimizing the fast fashion brands of supply chain and logistics, they are constantly accelerating, but is this really a good thing?