Recently, ZARA’s sister brands Bershka, Pull&Bear and Stradivarius officially issued an announcement that starting from July 31, online stores will stop selling brand series products. As fast fashion brands that are well-known to the public, the three brands have closed all physical stores in the Chinese market in 2021. This move to close the online store also marks their complete withdrawal from the Chinese market.
Coincidentally, the first store of another fast fashion brand H&M in mainland China also officially closed on June 24. The American fast fashion brand GAP has recently been frequently reported to be withdrawing its stores.
In the past, European and American fast fashion clothing brands made a lot of money in the Chinese market by relying on their fashionability and speed of new products. However, in recent years, major fast fashion brands have retreated and failed in the Chinese market. From peak to decline, the sluggish fast fashion giants face huge challenges.
The three brands Bershka, Pull&Bear and Stradivarius, which have completely withdrawn from the Chinese market, as well as the famous fast fashion brands ZARA and Massimo Dutti, are all affiliated to the old Spanish fashion company Inditex Group. The three brands entered the Chinese market one after another around 2009. During the heyday of fast fashion brands, the three “sisters” formed a group with ZARA to occupy prime shops on the first floor of many large shopping malls and shopping malls.
Inditex Group, together with the American casual fashion giant GAP, the Swedish fashion giant H&M, and the German affordable clothing chain giant C&A, are known as the world’s four major fashion chains. Currently, their fast fashion brands are facing embarrassing situations to varying degrees in the Chinese market, and store closures have become a necessary means for brands to survive and reshape their business systems.
On June 22, H&M closed its first mainland store on Huaihai Middle Road in Shanghai. This is H&M’s first store opened in the Chinese market in 2007 and has been in business for 15 years. The financial report for the first quarter of fiscal year 2022 shows that H&M’s overall operating conditions in the quarter were not good. As of the end of February this year, the number of stores worldwide decreased by 228, and more than 40 stores were closed in the Chinese market in the first quarter. Monki, a low-priced fast fashion brand owned by H&M, exited the Chinese market in April this year. Gap’s brand Old Navy will withdraw from the Chinese market in 2020; C&A also announced the sale of its Chinese business in the same year to integrate online and offline businesses. Earlier, European and American fast fashion brands such as Forever21, Topshop and New Look also withdrew from the Chinese market.
Uniqlo, another fast fashion giant, has also fallen into anxiety. Its sales revenue and operating profit in the Chinese market have both declined. The mid-term report of Uniqlo’s parent company for fiscal year 2022 shows that Uniqlo has temporarily closed 133 stores in Greater China.
The cause of Shen Ji
In 2002, Spanish brand Mango and Japanese brand Uniqlo entered the Chinese market, which marked the beginning of foreign fast fashion brands entering the Chinese market. Subsequently, GAP, H&M, ZARA, etc. entered the Chinese market one after another. With their design to keep up with fashion, supply chain response speed, product introduction and other “fast” characteristics, they quickly established a world in the Chinese market, and even Forming a “dimensionality reduction blow” to domestic clothing brands.
Over the past 20 years, the development of European and American fast fashion brands in the Chinese market has continued to slow down, and it seems that they no longer meet the needs of the Chinese market. What is the reason for the failure?
1. Poor quality and “acclimatized” design
“Basically it can only be worn for one season, and the T-shirt can almost be used as a skirt after being washed a few times.” “The sweater pills before you put it on, and the sweater fades.” “I feel that their clothes are not designed for Asians, only suitable for Asians.” Europeans and Americans.” On social platforms, the quality and style of European and American fast fashion brands are the most complained about by consumers. Poor quality and inappropriate design have almost become common problems for these brands.
2. China’s local brands are rising rapidly
Secondly, China’s local brands are rising rapidly. The recently released 618 list of women’s clothing brand Tmall shows that local fast fashion brand Urban Revivo has surpassed Uniqlo to become the biggest winner in the women’s clothing track on the platform. Tianyancha data shows that the brand currently has more than 200 stores. The top three sales of women’s clothing brands are Urban Revivo, Uniqlo and MO&Co. Two of the top three are local brands, with ZARA ranking 12th.
The huge market has given rise to local fast fashion brands and tens of thousands of Taobao stores. They also follow seasonal trends at an ultra-fast speed, and their designs are more suitable for Chinese people’s body shapes and skin colors. The new generation of young people have more and better choices, and they no longer blindly pursue “overseas brands”.
3. The impact of digital marketing
Thirdly, traditional e-commerce retail channels led by Tmall and social retail channels represented by Douyin and Xiaohongshu have greatly improved the sales efficiency of clothing brands. Local clothing brands have not only achieved innovation in aesthetics, design, and production, but also achieved transcendence in digital marketing channels. However, the lag in the development process of e-commerce and the differences in online consumer culture between China and the West have made European and American fast fashion brands “behind the scenes” in the face of the increase in social retail channels, and have not kept up with the rapidly developing market changes.
Due to intensified competition, lack of innovation and marketing shortcomings, these European and American fast fashion brands are facing unprecedented pressure in the Chinese market.