Can The Fast Fashion Giants In The Market Make Up For Their Position If They Break Away From China'S Brands

Recently, we've been going to the three famous brands of Zara.

As early as a few days ago, three sister brands of Zara, namely Bershka, pull & Bear and Stradivarius, announced the closure of the store, saying that it would officially end its operation on July 31. In fact, at the beginning of last year, the three brands announced the closure of all offline stores. In other words, Bershka, pull & Bear and Stradivarius are about to withdraw from the Chinese market.

A user in the little red book said, "the prices of these brands of clothes are OK, and the quality is also OK. Although the styles are relatively ordinary, they are durable. Now they can't be sold on the Internet. It's a pity.". Many consumers also began to worry that more and more foreign brands choose to withdraw from the domestic market, and they can choose less in the future, and the price of domestic emerging brands is not cheap.

International fast fashion giants withdraw one after another. Are the rising domestic brands beating them?

　　 "Abandoned son" of magnate

Bershka, pull & Bear and Stradivarius, the three brands, have long been on the verge of withdrawing from the domestic market.

Around 2009, as the sister brands of Zara, Bershka, pull & Bear and Stradivarius entered the Chinese market one after another. They opened together like conjoined babies and often stationed next door to Zara. During the peak period, they opened 200 stores in major cities across the country, but since 2016, stores have been closed continuously. In 2019, the number of stores in Stradivarius has dropped to half of that in 2016.

Different from Zara, Bershka, pull & Bear and Stradivarius belong to the lower gear in fast fashion, which also determines that there are many quality problems. Under the general trend of domestic consumption upgrading, their products are no longer as popular as before.

but It seems that this is not the main reason why INDITEX group, the parent company of Zara, chose to give in. However, the three brands themselves are increasingly inconsistent with INDITEX's strategic adjustment. Even in the European and American markets, the homogenization of these three brands is becoming more and more obvious, which gradually hinders INDITEX's performance.

According to the second quarter report of 2020 (April 30, 2020 to July 31, 2020), the revenue of Zara and Zara home is 5.53 billion euro, accounting for 68.9% of the total revenue; The revenue of pull & bear was 580 million euro, accounting for 7.2%; Massimo dutti's revenue was 490 million euro, accounting for 6.1%; Bershka's revenue was 690 million euro, accounting for 8.6%; Stradivarius had revenue of EUR 500 million, accounting for 6.2%.

Another look at the financial year 2021 performance report released by INDITEX shows that in the 12 months ending January 31 this year, the sales of Zara and Zara home increased by 39% to 19.586 billion euro, accounting for 70.7%. The proportion of other brands such as pull & Bear has further decreased.

In addition, it is worth noting that even though fast fashion has been declining in the domestic market, INDITEX group, which lost this market, has achieved a 10-year high performance in the first quarter of this year.

In the past two years, an obvious trend of INDITEX group is high-end, especially after the second-generation successors gradually take over the company, Zara has accelerated the layout of high-end clothing. On the eve of the annual performance report, Zara released the ss22 Zara Studio Series jointly designed by Zara studio design team and stylist karltempler, which is a high-end garment covering women's, men's and children's wear.

According to the company's analysis, the price of high-end products increased by 4.4% in the fourth quarter of last year.

When Zara is upgrading towards high-end, the strategic position of Bershka, pull & Bear and other brands of affordable clothing may also be improved, but serious homogenization is bound to affect the overall strategic adjustment of INDITEX group. Abandoning the unpopular Chinese and Asian markets may be just the first step for the Spanish fast fashion giant to change the layout of affordable series brands.

　　 Online reversal, offline "rotten"

In the recent 6.18 event, the ranking of clothing brands in the domestic market has changed significantly. According to the "2022 tmall Taobao 618 pre-sale" clothing brand list, local fast fashion brand urban revvo has surpassed UNIQLO to become the big winner of women's wear track. UNIQLO, which has long been the first place for a long time, has been pushed out of the altar. Another domestic women's wear brand MO & Co. rose to the third place, while Zara fell directly to the 12th place.

In addition, tmall also released the list of outdoor sports brands, and Anta's Philo ranked among the top three, second only to Nike and Adidas, becoming a big black horse of domestic brands.

International brands and fast fashion brands have gradually lost their market in the domestic market. Domestic brands such as Li Ning, taipingniao, Huili and ur are being recognized by the younger generation. In particular, ur has defeated the fast fashion giants with fast fashion mode, which means that UNIQLO, Zara and other brands that have grown up by fast fashion mode have completely lost their core advantages in China. The reason is that online channels and online consumption habits are the key to the counterattack of domestic brands.

According to the global e-commerce penetration data released by emarketer at the beginning of the year, the scale of China's e-commerce market reached 3 trillion US dollars, and 46.3% of the retail sales of the consumer market occurred online. The penetration rate of e-commerce in the United States was only 16.1%, that of Norway was 19.4%, that of Finland was 14.6%, and that of Sweden was 14.1%. Obviously, The penetration rate of e-commerce in the European and American markets is generally low. Therefore, this also determines that the fast fashion giants rooted in the European and American markets lag behind in the online retail layout and digital marketing.

China's domestic clothing brands not only made efforts in the traditional e-commerce retail channels led by tmall and Jingdong, but also attached great importance to the emerging grass planting and retail channels represented by shuoyin and xiaohongshu, which captured young consumers.

however, Domestic brands have forced the international fast fashion brands to retreat, but they have not successfully occupied the market gap after the giants leave the market. There is a huge contrast between the scene of offline stores and the activity of online channels. This is why the domestic clothing brand half flame, half the sea water reason.

Take taipingniao as an example. In recent years, taipingniao has created content and precision marketing on platforms such as station B, Shuo Yin and xiaohongshu. Up to now, the revenue from online channels has reached 31.8%. In 2021, taipingniao opened 1315 stores and closed 717 stores; In 2020, 1049 new and 929 closed; In 2019, 914 new and 1012 closed.

Although the online channel has become a new driving force for growth, clothing brands generally focus on offline operation, and more than half of their revenue still comes from offline operation, and the recession of offline operation has not changed much this year.

Yingshang big data takes 4127 shopping malls in China as the statistical sample. The survey shows that the average daily total passenger flow from January to April in 2022 is only 12861, which is 19% lower than that of last year. The average passenger flow of shopping centers such as Nanjing, Tianjin and Guangzhou decreased by 10% compared with the same period of last year.

A consumer said, "in the past, shopping malls were crowded with people on weekends. Clothes with brand names sold expensive but a large number of people bought them. Now I go shopping occasionally and find that the shopping malls are quite cold and quiet. Whether it is foreign brands or fake foreign brands, there is little passenger flow, but there are more domestic ones.". In addition, there is a common phenomenon that consumers find that the clothes in offline stores seem to be more and more expensive, "any one will cost three or four hundred, and unknown brands can sell more than one thousand.".

Online and offline different states, not only trouble consumers, but also domestic clothing brands.

　　 Domestic brands, difficult to find "cheap"

Apart from the sister brands of Bershka, pull & Bear and Stradivarius, the status of fast fashion giants in the domestic market is not as good as before. On March 31, H & M's Monki tmall's official flagship store was closed. On June 24, H & M closed its first store in mainland China, which has been in operation for 15 years, in the middle of Huaihai Road in Shanghai; UNIQLO has temporarily closed 133 stores in Greater China, according to the interim report of fiscal year 2022.

Moreover, affected by the Xinjiang cotton incident, many domestic consumers are hostile to H & M, Adidas, Nike and other brands.

It can be said that the withdrawal or crisis of international brands is just the opportunity for domestic brands to seize the market. We can see that ur, taipingniao, Anta and other brands are indeed stepping up the pace of marketing and expansion.

From the individual point of view, the domestic brand gains a lot. For example, ur, affected by the epidemic situation in 2020, Zara, H & M and other brands had to shrink their battle lines and close stores. In the first three quarters of ur, there were 22 new stores, and the annual turnover of ur in this year exceeded 5 billion yuan. Up to now, ur has nearly 300 stores and successfully surpassed UNIQLO in the 6.18 ranking.

However, one problem is that the sales volume of domestic top brands continues to rise, but the overall concentration of the industry has not significantly improved. According to Euromonitor data, from 2011 to 2020, the concentration of China's women's wear industry has remained at a low level all the year round, with a slight increase. CR10 of the industry increased from 8.9% in 2011 to 10% in 2020, and Cr5 increased slightly from 5.7% in 2011 to 6.3% in 2020.

Why is this? A lot of it is With the trend of more and more dispersed clothing market, the market share vacated by the fast fashion giant is not occupied by the newly rising domestic top brands, but scattered to other brands, large and small.

For example, women's online Red stores, as early as the double 11 in 2017, the top ten online women's clothing hot selling stores appeared. My favorite wardrobe and Anna it is amazing, at that time, the latter surpassed the Amoy brand handu clothing house. Later, in addition to the online stores brought up by Zhang Dayi and others, many online fashion stores such as Jiuwu, Aviva global store, doggyqin, uniken and famous stores also emerged, with more than one million fans.

At the same time, some clothing retailers or upstream manufacturers have created popular models with the help of shaking sound live broadcast, which also provides more choices for young consumers.

As for the fact that the domestic fashion brands and the overseas brands have been in a similar situation, it is just the reason why the overseas fashion brands have been affected by the sluggish situation.

For example, ur, ur's overseas stores are mainly distributed in Singapore and Thailand. In the future, it will focus on the overseas markets dominated by Southeast Asian countries, and may enter more European countries and American markets.

Of course, the most successful is the cross-border fashion e-commerce website sheen in Nanjing. In the past two years, the online retailer's market share has grown dramatically, surpassing H & M, Zara and forest21, making it the largest fast fashion retailer in the United States, according to a June report from east research. It is expected that sheen will become the fourth largest clothing company in the world this year.

　　 Founded by Chinese people, but not sold in China's market, Sheen has conquered the global market with its rich products, low unit price and fast update. This is not only built on the basis of China's highly mature clothing supply chain, but also seize the global clothing market recovery The opportunity.

Since 2022, major global retail markets have performed steadily. In February, the sales of clothing, footwear and leather products in Canada reached 3.08 billion Canadian dollars (about US $2.4 billion), with a year-on-year increase of 40.6%; In March, the retail sales of clothing and apparel (including footwear) in the United States reached 26.94 billion US dollars, up 7.3% year-on-year; Compared with the same period last year, retail sales in all European countries have increased significantly, and basically recovered to the pre epidemic level.

Americans especially prefer sheen, which is even more popular than Amazon, which also provides a typical case for domestic brands to go abroad.

But if the domestic clothing brand wants to become a giant, going to sea is also the only way in the future.