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Why Do Fast Fashion Zara And UNIQLO Want To Bet On The Chinese Market?

2018/1/12 14:37:00 104

Fast FashionUNIQLOZara

 Zara and UNIQLO

Global growth is weak.

Fast fashion

Zara and

Uniqlo

Coincidentally bet on the Chinese market.

According to the world clothing shoes and hats net,

Zara

The parent company Inditex group has been developing rapidly in Asia in recent years. According to the data, the group currently has 1458 stores in Asia, with annual sales exceeding 5 billion 500 million euros, and Asian market share has increased from 8.9% in 2006 to 24% in 2016.

It is noteworthy that China has become the second largest market after Spain.

In fiscal year 2017, Inditex group adopted the strategy of synchronous expansion on the offline offline in the Asian region. In the first three quarters, the group added 212 stores in 52 markets, including 90 in Asia.

In the past ten years, the Inditex group's global sales revenue has increased by 184%, while the Asian market has increased by 664% in China's regional performance.

Group CEO Pablo Isla said that although the group's brands have taken a favorable position in all the major Asian markets, the Inditex group will pay more attention to the Asian market development due to the relative contraction of the markets in South Africa, Egypt and Australia.

Inditex group was founded by Spain's richest man Amancio Ortega in 1963. In addition to Zara, Inditex group's brand also includes Bershka, Massimo Dutti, Pull&Bear, Stradivarius, Zara, Inditex and X.

 Zara and UNIQLO

The picture shows the proportion of sales of Inditex group from various regions in the first half of fiscal year.

According to statistics, since the Inditex group first entered the Chinese market in 2004, its brand has opened 620 stores in 68 cities in China in just ten years, 35% of which are Zara stores, and other brands also have more than 70 stores. However, Uterque brand has not yet entered the Chinese market.

Pablo Isla, chief executive of Inditex group, said that although the group's business in China has already reached a certain scale, considering the huge population base of China, its business still has great potential.

In Spain, he says, every 26 thousand residents will have 1 brand stores, while in China there are 1 stores for every 2 million 200 thousand people.

In order to better operate and develop China's regional business, Inditex group has opened its branches in China, especially in China.

The first quarter results of the first quarter of the 2018 fiscal year, released today by the Japanese fast fashion uniqo company, show that UNIQLO will increasingly rely on the growth of overseas markets, including China.

The group said that the first quarter of overseas QQ revenues exceeded the Japanese market for the first time, especially in the Greater China, South Korea, Southeast Asia and Oceania, where revenues and profits recorded substantial growth, driving the division's performance.

UNIQLO has always been one of the hottest brands in 11, and driven by Japan's overseas market, such as greater China, the sales of UNIQLO parent company surged by 148% to 119 billion 200 million yen, or 6 billion 960 million yuan, to a record high in the year ending August.

In view of the strong purchasing power of Chinese consumers, UNIQLO plans to increase to 1000 stores in China in 2020, and overseas sales as a whole are expected to exceed Japan in a few years.

 Zara and UNIQLO

Under the effective localization strategy, UNIQLO's performance in Japan's overseas market, including greater China, has increased rapidly.

The picture shows a store in UNIQLO in China.

As of the first quarter of November last year, the revenue of fast selling group rose 16.7% to 617 billion yen, or 35 billion 920 million yuan, and the net profit of shareholders increased by 12.7 to 78 billion 500 million yen, or 4 billion 570 million yuan, and operating profit of 113 billion 900 million yen, up 28.6% over the same period last year.

XXX group refers to the double growth of revenue and profit in the first quarter of the new fiscal year, exceeding expectations.

In addition to "fast", another core competitiveness of fast fashion is price. Analysis means fast fashion. In the competitive market of China, price war will not be avoided to maintain growth.

In the nine months ending last October, Inditex group's net profit rose 6% to 2 billion 340 million euros compared with the same period last year, a sharp slowdown compared with 9% in the same period last year, while sales rose nearly 10% to 17 billion 960 million euros and gross margin fell further to 57.4%.

Investors are beginning to worry about the declining gross profit margin of the Inditex group.

As more than half of the sales of Inditex group are generated in the form of non euro currency, the strength of the euro exchange rate has been a blow to its profits.

However, Zara is not a worry in China.

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In a report, the success mode of Zara was interpreted. The success of the group was mainly due to the fast and fast response business model.

The group's application to flat management structure and big data enables it to respond quickly and timely according to the latest market environment and adjust strategy.

In other words, Zara has a core competitive valve.

In addition to being able to control the demand for new products quickly, the other way is to adjust the price of the valve. When a certain time period can not fulfill the predetermined sales target, the valve will be opened, such as reducing prices to stimulate sales, so you will find that Zara can maintain its high sales growth.

In order to counter the rise of Zara and other global apparel giants in the Asian market, UNIQLO may also feel the pressure of price competition.

According to earlier reports, in order to reduce costs, UNIQLO will set up its first African production base in Ethiopia, which will start next year.

Ryui Masa, chairman and chief executive officer of fast retailing group of UNIQLO parent company, said that the factory will produce basic shirts and other basic products in the early stage.

Ryui Masa pointed out that the labor costs of the main production bases of China and Vietnam, such as Vietnam, have been rising. Compared with those without the introduction of the minimum wage system, Ethiopia can further reduce the group's production costs, thereby enhancing its brand's price competitiveness.

It is reported that the cost of opening a garment factory in Ethiopia is about 50% lower than that in China.

In 2016, Liu said that Xun marketing group will promote its business through the price reduction of UNIQLO.

Ryui Masa said: "consumers do not agree that new products are equal to high prices. The environment of fashion retailing is very difficult now. It is a mistake for companies to raise prices in this environment."

In order to better enhance the core competitiveness of the brand, fabric technology has become one of the breakthroughs sought by UNIQLO in recent years in addition to the speed and price of product updates.

In October of this year, UNIQLO and Dongli group, a Japanese textile technology company that had been working together for 15 years, held a large-scale world clothing technology exhibition in New York, displaying the five innovative technology products.

In the 15 years of cooperation, Dongli group and UNIQLO fabric business value has reached 850 billion yen. Since the launch of HEATTECH technology in 2003, the series has sold 1 billion products worldwide.

(related reading)

Another fast fashion H&M is to improve the price performance of its products by attracting cross-border cooperation. The analysis shows that H&M is in a very awkward position, and its fashion and update speed are not as good as Zara, and its quality is not as good as that of UNIQLO.

According to the latest data, H&M's fourth quarter sales will be recorded for the first time in more than 20 years, with a reduction of 4% to 58 billion 450 million kronor, or about 6 billion 950 million US dollars.

Barclays Bank lowered its H&M rating to reduce its holdings, and pointed out that most of its growth came from opening new stores.

According to other statistics, the operating profit margin of H&M has dropped from 23.5% in 2007 to 9.6% today, only half of that of Inditex group.

On the 15 day of last month, H&M group announced strategic cooperation with Alibaba. Its core brand H&M and H&M Home will be settled in Tmall this spring. This is also the first official online channel of H&M group in addition to official website in China.

Some analysts pointed out that the H&M reversed its attitude and began to actively embrace Alibaba, which is behind its huge entity store network.

Consumers who are new and old weary may be tired of H&M's mediocre and rampant products.

H&M CEO Karl-Johan Persson admitted earlier that H&M had made a lot of mistakes on the entity store. The company still needs huge changes. The content of this change will include price adjustment, which makes the industry full of speculation.

With the rapid development of high technology and social media, the global luxury fashion retailing industry will be faced with severe challenges in 2017.

Recently, fashion big data company Edited based on more than 660 million online product research, predicted that next year's fashion retail industry will now price war.

MUJI MUJI is using price cuts to stimulate growth.

In September last year, MUJI MUJI's fifth round of price cuts in China officially opened.

MUJI MUJI has lowered the price of products from the mainland market since October 2014, and is expected to achieve the basic price parity between China and Japan in 2018.

According to the world clothing and shoe net, since the beginning of 2017, the price of clothes sold by Zara in the Chinese market has fallen by 10% to 15% on average, which may reflect from the side that the group has not reached the expected rate of growth in China, and has begun to feel the fierce competition between competitors and domestic jewelry brands.

Zara is not the first fast fashion brand to quietly cut prices, nor will it be the last one.

More interesting reports, please pay attention to the world clothing shoes and hats net.

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