Fast Fashion China Market Sing, Can Local Brands Break The Tide?

The development of fast fashion brands in China has slowed down, and some have even stopped.

Recently, the news of the US fast fashion brand Forever 21 withdrawing from the Chinese market has aroused concern in the industry.

In fact, foreign fast fashion brands have been repeatedly defeated in recent years in China. In 2018, two brands of Newlook and TOPSHOP have been withdrawn from the Chinese market.

Zara and H&M, which are still "guarding" in the Chinese market, are also deeply stuck in the performance bottleneck. How to keep China's huge market in the cold winter market is a pressing problem for these fast fashion brands.

Meanwhile, some people in the industry pointed out to the blue whale producer that the withdrawal of some brands has brought more opportunities to Chinese brands, such as Lining and Bosideng, who are infiltrating into the fast fashion field.

However, there are also people in the industry who believe that domestic brands still have problems of lack of R & D awareness and partial homogenization of products.

Fast fashion brands "get together" and lose China

Foreign fast fashion brands in the Chinese market "acclimatized" gradually emerged.

A few days ago, Forever 21 announced in its official website that the official website of China will be temporarily closed. Orders before April 29th can be applied for refund before May 7th.

Meanwhile, its flagship store in Tmall also stopped operation in April 29th.

The blue whale producer has searched the Taobao client for the brand, unable to show the flagship store.

When the online store closes, stores under the Forever 21 line also begin to clear up the goods.

Blue whale production reporter interviewed found that the brand in Beijing's many stores are doing discount sales, and stores are relatively deserted.

It is understood that Forever 21 is a popular brand of the United States, and has been established for more than 30 years. Its target customers are mainly 20-30 year old urban residents. It is also considered to be a well-known fast fashion brand whose influence is slightly weaker than that of Zara and H&M.

Statistics show that Forever 21 first entered the Chinese market in June 2008.

At that time, Zara entered China only 2 years after entering the Chinese market in 2002. H&M has just entered China for 1 years.

However, Forever 21, which was "early in the morning", did not develop smoothly like UNIQLO, Zara and H&M. When other fast fashion brands attacked the first tier cities such as North China and Guangzhou, Forever 21 opened China's first store in Changshou City, Jiangsu, and only 1 years later it hurried to shut down.

In 2012, the Forever 21 high profile announced its new entry into the Chinese market and opened a new store in Wangfujing commercial street, Beijing.

However, judging from the market performance, the brand still seems to be inadequate.

Public information shows that at present, the number of Zara stores in China is about 500, while UNIQLO is as high as more than 700, while Forever 21 has only 20 stores before it closes.

As a matter of fact, the fast fashion brand in China is not only Forever 21.

Prior to October 2018, Newlook, the UK's high street clothing brand retailer, announced its withdrawal from the Chinese market. In November 1st of the same year, TOPSHOP issued a notice at its Tmall flagship store, saying that because of the adjustment of the international business operation strategy, "TOPSHOP Tmall flagship store will be closed in the near future, the shop will be cleared from now on, and the non quality problem will not be replaced."

(some fast fashion brands quit China)

In response to the rapid fashion brand losing the Chinese market in succession, Cheng Weixiong, general manager of the footwear and garment industry independent analyst and Shanghai Liang Qi brand, told the blue whale producer reporter that China's channels are more diversified and new channels are in the process of continuous iteration.

Taobao, Tmall and other channels are also a challenge to fast fashion brands.

The "same section" of online channels has been very fast, which has impacted on the core strengths of fast fashion brands, and has also intensified its survival in the Chinese market.

"If the brand takes into account the medium and long-term interests and continues to study the Chinese market, it will need to compensate the loss of the Chinese market by other market profits. However, some brands choose to withdraw from the Chinese market under the pressure of the investors and the capital side. This is actually a clumsy way, because there is a broad market for China, and the brand is not here to kill."

Cheng Weixiong said.

How do Zara and H&M find their way out and direction?

In addition to the brand that has withdrawn from the Chinese market, the other fast fashion brands still in the Chinese market are not easy to live, such as the development of Zara and H&M brands.

Prior to the first three quarters of fiscal year 2018, the Zara parent company Inditex SA group released the preliminary performance data for the first three quarters of the fiscal year, showing that the group's sales growth continued to slow down to 3% in the first nine months of 2018, which was significantly different from the 10% growth rate recorded in the same period last year. According to the fourth quarter and annual earnings report released in 2018, the sales of H&M group increased by 5% in the 2018 fiscal year, while in 2015 2015, the sales growth of the group was 19%, 6% and 4%, respectively. That is to say, since 2015, the growth rate of H&M in China has shown an overall slowdown.

In addition, the third quarter performance report released by the American fast fashion brand Gap group as of November 3, 2018 showed that the group achieved net profit of US $266 million during the reporting period, an increase of 16% over the same period, while no increase in same store sales.

In the face of the cold spell of fast fashion brands in China, H&M related staff interviewed in an interview with blue whale producer said that in order to achieve success in the ever-changing market environment, the group must adapt to changing customer behavior.

At the same time, the rapid pformation of fashion retailing is continuing. The core and driving force of pformation is digitalization. It requires enterprises to pform their businesses and reexamine them at a faster pace, which brings many challenges to enterprises.

H&M has continued to grow and expand through the optimization of stores and the coverage of online stores, encouraging customers to explore their own styles, and promoting the pformation of fashion industry through old clothes recycling.

Cheng Weixiong told the blue whale producer that the brand positioning of these fast fashion brands is highly conceptual. The fast fashion brands are driven by price rather than high-end brands.

However, the current fast fashion brand channel can not sink, the key layout is in the northern Guangzhou, Shenzhen and other first tier cities, the cost is high, the consumers' purchase intention changes rapidly, the single store effect is not enough to support the cost, which leads to the input-output of the brand is not directly proportional.

In fact, brands have started to choose to sink to save their performance.

It is understood that in recent years, MUJI products, which have fallen into the bottleneck of performance, have launched 10 price cuts in the Chinese market in 5 years.

In this regard, Cheng Weixiong believes that this is actually "Muji" performance under the pressure of "sinking" performance, even if the price cuts, it will not withdraw from the Chinese market.

At present, fast fashion brands are attacking the first tier cities. In fact, this group of users has no need for education. They know what the international brand looks like.

Sinking channel is a new way for fast fashion brands, and this means higher investment.

"For these brands, we need to study the needs of Chinese consumer groups and not impose European and American life scenes on Chinese consumers.

Now the main consumer groups are concentrated after 80, 90 and 00, their consumption concept is more uncertain.

Therefore, foreign brands must think about how to integrate into the local market.

Cheng Weixiong told the blue whale producer.

Opportunities and challenges of local brands

With the rapid growth of foreign fast fashion brands, domestic brands will have a chance to breathe.

In recent years, local clothing companies have begun to test water and fashion.

Public information shows that since the second half of 2015, Lining has launched a series of blue spring oriented spring products. This product positioning sports leisure and fast fashion, with two or three line city's core business circle and shopping center as the main offline sales channels; in August 2017, Hai Lan's home shares fast fashion brand UR pformation, and even launched the fast fashion brand black whale HLA JEANS, positioning the young consumer group about 20 years old, and later was known for sponsorship debate program "wonderful flower".

From the perspective of performance and attention, domestic brands are also rising.

In 2018, Lining's many appearances from New York fashion week to Paris fashion week attracted much attention.

In terms of performance, Lining's main business income in 2018 amounted to 10 billion 511 million yuan, an increase of 18.45% over the previous year, and the net profit of the main business was 715 million yuan, an increase of 39% over the same period last year.

However, the breakout of domestic brands also needs to face many difficulties.

Recently, the HLA JEANS, a fast fashion brand of Hai Lan's home, was caught up in the search for other clothing brands. However, Hai Lan's home did not respond, but it caused a lot of consumers to "Tucao". At the same time, the industry also questioned its "no design and research, just a clothing factory".

If international brands do not sink, then domestic brands will have a breathing space.

However, if international brands begin to realize that they have to sink channels, they have global supply chain operation and brand marketing experience, and local brands have relatively little advantage.

Cheng Weixiong said.

Author: Lu Jiale