For Fast Fashion Brands, The Market Potential Of This Country Will Be Stronger Than That Of China?

Although the international fast fashion brand is not early in the India market, it has developed a momentum of vigorous development, and gradually positioned the India market as the focus of the brand expanding the international market. What causes the fast fashion brands to value the India market? What are the international fast fashion brands' strategies after landing in India?

Recently, H&M's latest earnings report showed that sales in India rose by 39% over the second quarter of May this year, which is one of the most robust growth in its global market. Some analysts believe that H&M's profit is mainly driven by the increase in new stores and the driving influence of consumer demand.

A year ago, H&M sales in India increased by 16% in the same quarter to about 2 billion 730 million rupees. Although the H&M earnings report did not disclose the actual sales figures for the quarter, the rough calculation was about 3 billion 800 million rupees.

In less than 4 years after entering the India market, H&M has sold more than 11 billion rupees, becoming the fastest growing fast fashion brand in India. H&M global business CEO said that by the autumn of 2019, H&M will begin to deploy the India network channel and launch it on the electronic business platform Myntra. This means that millions of consumers in India will be able to experience the fast and convenient H&M network sale service.

It is understood that Myntra is one of the most popular online fashion retailers in India. A few years ago, Myntra bought Jabong with $70 million and joined forces to become the most competitive brand in India's electricity supplier market.

According to a latest report issued by the India government, e-commerce sales in India increased by 4% in the first quarter of this year compared with the previous quarter. According to the report, sales of the top 10 countries in the international e-commerce market in the first quarter were basically flat, while only India and Japan rose. By 2022, India's e-commerce market will grow 3 times, more than 100 billion dollars. It can be seen that H&M is aiming at this opportunity and hopes to make something in India's electricity supplier market.

Not only online channels, offline channels have also become the focus of H&M layout. It is reported that H&M has opened a new store in India every month, with a total of more than 42, and plans to reach 50 by 2020.

For brands, it is very important to understand the cultural identity of India market and its consumers. With the entry of global brands, India consumers have higher and higher requirements for store design, visual merchandising, product pricing, product design, marketing and so on.

As a result, H&M not only actively collaborated with local designers in India to launch a series of products with local characteristics, but also launched basic daily clothing for India market, which is lower than most of its competitors.

Ryui Masa, founder and chief executive officer of UNIQLO, said recently that India could become the most exciting market in the future. He expects India to surpass China and its own as the largest selling market. In addition, he believes that India may also become a global sourcing base for UNIQLO in addition to China and Bangladesh.

As a result, UNIQLO plans to launch its first store in New Delhi, India, at the end of this year, which will be the first store in southern Asia. Ryui Masa said that the new store will be 60 thousand square feet in size and the largest retailer in India. At present, the largest fast fashion store in India is a 5 storey store in southern Mumbai, with a total area of more than 50 thousand square feet, followed by a H&M store with an area of 40 thousand square feet. Zara Ryui Masa suggested that India has nearly 1 billion 300 million people, but there are not many large modern stores in India in terms of the relatively large population. UNIQLO plans to expand its market in New Delhi and its surrounding areas, and then consider opening stores in other parts of India.

It is understood that UNIQLO's entry into the India market has benefited from the new rules of foreign investment launched by the India government. According to the latest regulations, UNIQLO will be able to set up wholly-owned branches instead of joint ventures with local partners.

UNIQLO spokesman said UNIQLO would have to follow other requirements of the India government, that is, 30% of retail products must be purchased locally. UNIQLO said it would work with the government to meet this requirement.

Overseas markets have been the growth engine of UNIQLO's performance. According to the 2 month semi annual report of UNIQLO from September 2018 to 2019, the operating profit of UNIQLO's overseas business was the first time to exceed Japan in half financial year. From September 2018 to February 2019, the business profit of UNIQLO's overseas business reached 88 billion 400 million yen, exceeding the Japanese domestic 67 billion 700 million yen operating profit.

Ryui Masa once remarked that Asia today is the focus of growth in UNIQLO business, and that millions of consumers in Asia are entering the middle class. In particular, with the rapid development of India's economy and the increasing disposable income of the growing middle class, UNIQLO is looking forward to the India market.

The fast fashion brand Zara took the opportunity to enter the India market as early as 2010. At that time, India's fast fashion market was not mature. At the same time, people lost interest in Benetton and other fashion brands that had been in India market for nearly 20 years. So the appearance of Zara could be called India's oasis of fashion and showed amazing sales volume.

"Asia is one of the fastest growing markets in our country. We will continue to push forward the development of Zara in the India market in accordance with the past speed," said Zara Asian affairs director who was asked whether there was any plan to speed up the layout of the India market. "We do not want to become excessively anxious because we need the market."

Zara in the past few years, the action in India market is not very frequent. Since the establishment of a joint venture with Tata Group of India company in 2010 and the opening of the first Zara store in the same year, Zara has not opened up shop in India very quickly.

But this is not to say that Zara can keep calm. For Zara, India is also a "very important" production base besides Europe. At present, 40% of Zara products are produced in non European countries, and India accounts for a large proportion. Therefore, it can make a difference in India market, which means that Zara can gain more profit space by compressing logistics cost in this market.

Starting from the 2015 fiscal year, Zara has launched a global ploughing program in the world, which no longer pursues the growth of the number of stores, instead of focusing on the revenue efficiency of each store. The flagship store in Mumbai is a practice of this strategy in India.