Retail | fierce fast fashion competition, everyone comes up with changes - China Fashion Market Service - Chinabogeda.com
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Retail | fierce fast fashion competition, everyone comes up with changes

Promoting new brands, opening new stores, expanding e-commerce, entering new areas, implementing store reforms… Facing with weakly sales growth and fierce market competition, fast fashion brands have been a bit busy recently.

 

H&M: Promoting new brands and expanding e-commerce

H&M constantly looks for new breakthroughs according to the continued sluggish performance. In 2017, H&M had launched Arket with a mid- high-end brand independently. This year, H&M also launched a new clothing brand /Nyden for first generation of Millennials, which is also the ninth brand under the group. It sells products of /Nyden based on the “without following the trend, the season or any date”, and promotes it by non-fixed team leaders and seach for collaborative creative. /Nyden’s brand logo consists of a slash and two Swedish words Ny, den. Ny represents new and den represents it. The “/” symbol in front of Nyden means co-creation. As an experimental brand of H&M, the first series of /Nyden was put on sale on April 3, and the rest of the series will continue to be launched in batches.

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Except to the frequently launch of new brands, H&M, which has been struggling with the digital development, seems to suddenly realize the importance of e-commerce and start to make efforts in the e-commerce field. In March of this year, H&M formally settled in Tmall, opened an e-commerce channel in the Indian market, established a discount e-commerce Afound in Sweden, and planed to expand its e-commerce business to emerging markets such as Saudi Arabia and Uruguay this summer. It is ready to increase sales promotion to eliminate inventory. In terms of physical stores, H&M Group will continue to optimize and renovate its branded store network and launch new concept stores to enhance consumers’ shopping experience in physical stores.

 

Zara: Reforming the shopping experience in the store

In March of this year, Zara announced that it will launch a Zara AR APP . This APP was developed by French design firm Petronio Associates and is scheduled to launch on April 18 into 120 Zara flagship stores around the world with a trial operation for two weeks. Consumers download Zara AR and scan the QR code to activate the virtual model within 7-12 seconds by aligning the mobile screen with the store’s established location. Those virtual models can appear in the streets, the shops, or in the window. Customers can not only try on clothing through them, but also place orders online and share photos to social media. Obviously, Zara launched this APP not only to increase online orders, but also hopes to enhance consumers’ shopping experience through high-tech to attract young consumers. After all, holographic images are still quite fresh in the current fashion circle.

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Uniqlo: Opening new stores and transferring production lines

Stores as the direct way for catching the consumers have been the highlight of Uniqlo. On March 30th, a three-storey store with an area of about 2,600 square meters was unveiled at the Vientiane World in Shenzhen. This marks the Uniqlo official opening of the concept of “New Life Digital Experience Hall” in China. This new store has launched the opening interactive space with Digital Experience Pavilion and U Space. It opened four scene costumes experience area such as classic quality wardrobe, healthy living gas station, fashion culture and creative museum and 24-hour living space. A lot of electronic equipment have been added to the store to provide new product information, preferential information and wearing recommendations, so that consumers can experience LifeWear lifestyle and clothing scenes seamlessly online and offline. According to latest first quarter financial report of Uniqlo for the 2018 fiscal year, Uniqlo’s sales in overseas markets rose by 31.4% year-to-year.  This sales surpassed than in the Japanese domestic market for the first time. Uniqlo plans to open 1,000 stores in mainland China by 2020, which has now completed 60%. This means that in the next few years, Uniqlo will continue to expand at the rate of 100 stores per year, and more than half of the stores will sink to third and fourth-tier cities.

 

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In addition to the expansion of stores and reducing the costs, Uniqlo is further shifting production from China to low-wage Southeast Asia. Recently, Japan’s fast fashion giant Fast Retailing Group has disclosed its core brand Uniqlo 2018 cooperative foundries list. Comparing with the list in 2017, the factory in Vietnam has increased by 40%. The list, which is a long-term foundry for Uniqlo, accounts for about 80% of all orders placed in Uniqlo, with 184 factories in 7 countries, including China, Bangladesh, Cambodia and Vietnam, with an increase of 38 from last year. Although the number of factories in China has also increased, the production system of Uniqlo is still centered around China (accounting for 60% of the total), but the number of factories in Vietnam has increased significantly, from 27 to 38. In addition, Uniqlo plans to set up its first African production base in Ethiopia, which will start as soon as next year.

 

GAP: Exiting the wedding market and tring the makeup market

The Gap Group’s transformation strategy has been effective, and its performance is gradually recovering. In 2017, the Group’s sales increased for four consecutive quarters, of which Old Navy has become one of the fastest growing US apparel brands. Last year, the Gap Group announced a series of transformation strategies aimed at revitalizing the Gap Group and its subsidiary Old Navy, Athleta and small luxury retailer Intermix. The plan also includes $750 million to promote e-commerce and mobile technology. They are going to close 200 poorly performing of Gap and Banana Republic stores, open 270 stores, including the Athleta, Old Navy stores, and the Gap and Banana Republic factory stores for discounted sales. Until the end of 2017, Gap Group had a total of 3,594 stores worldwide, including 56 new stores in the fourth quarter. This year, Gap Group will withdraw from the wedding market and close its only wedding brand, Weddington Way. The Weddington Way, which was founded in 2011, will be officially closed after June 11.

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Except to transforming from a strategic level, Gap has also begun to try and enter new areas and accelerate the pace of moving closer to younger consumers. Recently, GAP opened the POP KIT Makeup Flash Shop in Shanghai. This is the first time GAP has tried to sale makeup products in China. Gap said that the establishment of the makeup flash shop is to provide a one-stop shopping experience, to attract more young consumers to the store, whether it will open up self-made makeup in the future is not yet known, but Gap plans to develop online business, invest in Gap’s online service and Mobile experience, shorten product cycle, and promote Gap’s performance and brand recognition with the help of young consumers.

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Obviously, in the past two years, fast fashion brands have generally not been very good, so pushing new brands, opening new stores, expanding e-commerce, entering new fields, implementing store reforms, enhancing the shopping experience and attracting young people groups and so on. Facing with weakly sales growth and fierce market competition, fast fashion brands are constantly rushing into new areas and expanding new businesses in an effort to improve the development status, seek new market opportunities, and looking for new performance growth points.

 

It may impossible for the prvious fast fashion brands return back to the pinnacle of development. But the pressures and challenges are clearly not just for fast fashion brands, the whole fashion industry is shuffling, facing and coping with challenges. Opportunity is actually the same for any brand. In order to cope with the ever-changing fashion industry environment and brutal fierce market competition, there is no choice but to keep pace with the times.

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