GAP Withdraws From The Chinese Market, Forever21 Closures, And How Will European And American Fast Fashion Survive?

US apparel group GAP11 announced on 21 May that its cash cow Old Navy will be withdrawn from the Chinese market from 2020, and will focus its efforts on the North American market in the future to achieve maximum benefit. This move also indicates another garment giant will fall in the Chinese market.

The rapid expansion of physical stores makes GAP difficult to end in the face of acclimatization, and GAP, which has led the market trend, will inevitably get into trouble.

As early as the early twentieth Century, when China's electricity supplier was still on the way and fashion brands were few, the fashion brands of other countries began to expand in China. Because of the new fast, cost-effective, consumers' enthusiasm for "foreign goods" only increased, foreign fashion brands also welcomed the expansion period.

Related reports indicate that ZARA and H&M, which still occupy a huge market, have been popular for a while. The expansion rate of ZARA was higher than 70% at that time. The famous fast fashion brands in Europe and America also entered the market quickly at the speed of a Monday store.

At that time, GAP, Forever21, Topshop and so on also entered the Chinese market, rather than the bonus period of development.

However, it didn't last long. In 2019, before GAP announced its withdrawal from the Chinese market, Forever21 had declared bankruptcy. The fashion giant, which has been established for more than 30 years, has been reported to the "Lai Lai" list by its suppliers for malicious default loans. Forever21 is also witnessing step by step towards the withering.

In addition, the other fast fashion brands were not as good as expected. In 2017, ZARA closed the biggest flagship store in Hangzhou, Zhejiang, and Topshop from Britain withdrew from the Chinese market. The giant H&M opened its shop more slowly, and the foreign fast fashion brand ended its brutal growth and began to enter the problems of performance diving and profit decline.

There are two reasons for this situation, one is the cost is too high than the electricity supplier, another domestic began to develop local brands to seize the market.

Live broadcasting business in 2019, like a flood of life, spread all over the Internet. Data show that 35% of the total sales of clothing in China come from the channel of e-commerce. Because European and American fashion brands did not care about online sales, they were quickly captured by Taobao, jitter, and other video players.

After making the basic template, they hang them in the commodity display bar, pay the deposit by the buyer, and then produce and transform according to the demand and quantity of the consumers, and make the order according to the market feedback, so as to avoid the storage loss.

With the gradual stabilization of the ecological chain, net red people can even open their own factory processing lines, and gradually replace the stores due to low intermediate consumption, becoming the first choice for consumers.

In recent years, the tide market has been developing rapidly. Many clothes and brands that are rooted in the mainland have inherent advantages. They are very familiar with China's environment, culture and fashion. From the spiritual level and the external level, they can satisfy young people's demand for fast fashion. For example, Lining, who is gaining momentum, is building a sports brand of Chinese style.

In the face of pressure and changing market, those European and American fast fashion brands are losing their initiative. Instead, they have been rid of the "fashion personality" label of UNIQLO. The momentum of these two years is just right. Since 2015, UNIQLO has been adding more stores to China, which has already surpassed all the brands of H&M, and it is far more than the total number of stores. Stores are fast fashion brands in Europe and America.

This brand is loved by consumers for its low price, comfortable design and giving people more breath of life. After the overall upgrading in 2015, business is booming at the moment.

Seeing the peer development and withdrawing from the Chinese market, GAP is somewhat frustrated and has to make development changes. GAP forms a brand diversification development strategy by incubating and acquiring Athleta, Intermix and children's wear brand Janie & Jack. GAP also decided to move headquarters to San Francisco to open a new design centre. It also provides various kinds of activities such as free distribution, washing, changing and stimulating growth, so as to achieve consumer sentiment.

In addition, in order to enhance the brand image, GAP is constantly increasing its attention to environmental protection and fashion. Market report, GAP has adopted a brand new technology to dye it to reduce pollution to the environment. It is expected that the product will start selling in spring next year. It is also planned to purchase cotton from sustainable sources by 2025.

Of course, at the moment, GAP decides to control the market first, close stores and reduce inventories.

In addition, other European and American brands are also seeking to make breakthroughs in order to follow the footsteps of Forever21. ZRAR began to launch cosmetics, backpackers and other fashion product lines, from all angles to develop other channels. H&M also settled in Tmall and began to brush its presence in activities such as super brand day and Tmall double eleven.

For fast fashion brands in Europe and America, rapid expansion has become a disadvantage. This leads to increasingly complex profit structure, and online shopping has a huge impact on stores. These are the problems they have to face.

Nowadays, fast fashion brands in Europe and the United States have gradually realized that only slow down, perception of the market and the real demand of consumers are the real fast fashion.