muji and uniqlo sales are not satisfactory... can this new italian fast fashion brand make money in china?
2024-09-13
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china business news (reporter chen qingwen/photo)there are more and more emerging fashion brands in the market, but the ones leading this trend are no longer the familiar uniqlo, h&m, etc. recently, the italian fast fashion brand subdued opened its first store in asia on wukang road in shanghai, officially entering the chinese market.
new international fast fashion brands are entering the chinese market. while domestic emerging brands such as beerbro and jie ao bu jin are rising strongly, it is becoming increasingly difficult for established fast fashion brands to develop, and their performance is not satisfactory. how will established fast fashion brands respond to the new market competition?
consumers choose clothes in a zara store.
unsatisfactory performance
international fast fashion brands are not having a good time. recently, muji's stock price fell 6.1% to a new low since august 9. the group said that its sales in existing direct stores and e-commerce platforms in china fell 12% year-on-year, falling to double digits for three consecutive months, and the east asia region fell 6.2%.
muji store.
uniqlo also faces challenges in the fiercely competitive market. the third quarter financial report of fiscal year 2024 released by fast retailing, the parent company of uniqlo, shows that in the first three quarters of fiscal year 2024, the revenue in greater china was 522.469 billion yen, accounting for 22.1% of the total revenue, which is lower than the level in previous years. pan ning, ceo of uniqlo greater china, said that in the third quarter ending at the end of may, uniqlo's revenue in the mainland china market declined, profits fell sharply, and same-store sales were sluggish.
consumers shop for goods at a muji store.
h&m's performance has also suffered a "cold winter" in recent years. although its sales in fiscal 2023 increased by 6% year-on-year to 236 billion swedish kronor, it has only just recovered to the level of 2019.
some consumers said that the products of fast fashion brands are getting more and more expensive, but the quality has not improved, and the cost-effectiveness is not high.
zhang peiying, a fashion expert, said that some fast fashion brands are not selling well. the problem is not that consumers are unwilling to spend money, but that they are unwilling to spend "unworthy" money. with the rise of the "quality-price ratio" consumption concept, domestic consumers no longer pursue blind consumption for brands. compared with the brand, they will pay more attention to the quality of the product, and the cost-effectiveness is the "root cause" of the brand.
subdued enters the chinese market
some international fast fashion brands are gradually declining in the chinese market, but this does not mean that there is no market for fast fashion brands in china.
recently, italian fast fashion brand subdued opened its first store in asia on wukang road in shanghai, officially entering the chinese market. the store covers an area of about 300 square meters, and the price of clothing products is about rmb 200 to 600, covering categories such as hoodies, sweaters, jeans and jackets. the brand's global expansion plan is in line with its strategy for the chinese market. in march this year, it obtained a 30% equity acquisition from investment company nuo, and its investment value is about 70 million euros.
it is reported that subdued and brandy melville (hereinafter referred to as bm) have similarities in brand positioning and store style. for example, subdued also focuses on youthful and casual items such as tight t-shirts, sweatshirts, jeans, etc. however, subdued's products are differentiated by size and are priced slightly higher than bm.
subdued is targeting young people. according to the brand's founder, the brand is targeting young people aged 14 to 20 who are just beginning to develop their own fashion style.
the reporter learned that following the wukang road store in shanghai, the brand’s stores located in chengdu east suburb memory and beijing’s sanlitun business district are expected to open in october and november, and the tmall flagship store is also scheduled to go online this year.
new brands are constantly appearing in the mall.
li hua, a college student, said that in the past two years, local new fashion brands have sprung up like mushrooms after rain, and each has its own strengths in design. when buying clothes, he will not pay for a particular brand, but pay more attention to the design style of the goods. he will pay attention to the opening of subdued in the chinese market, and will choose to buy if there is clothing that suits him.
seeking transformation
fast fashion brands used to rely on scale expansion to achieve growth, but now they are spending more effort on brand tone and shopping experience.
one of the corresponding measures of fast fashion brands is to open more flagship stores and image stores. for example, the first a&f getaway concept store in southwest china landed in chengdu taikoo li. the new image concept store is inspired by "fashionable holidays" and creates a holiday-like shopping environment for consumers through unique store layout and decoration.
after renovation, h&m's flagship store on nanjing east road in shanghai is not only equipped with soft lighting and oversized floor-to-ceiling mirrors for people to take photos and check in, but also has added a rest area and children's play space.
h&m ceo daniel ervér said that the company will take the lead in rebuilding 250 stores this year. these new stores will have fewer shelves, more experience space and better fitting rooms. some stores will also provide second-hand goods and rental services.
consumers shop for goods at a uniqlo store.
uniqlo has also closed some small stores, old stores, and stores that did not perform well in lower-tier markets, and has placed more emphasis on opening large stores and even flagship stores in china's first- and second-tier cities.
industry insiders believe that if fast fashion brands want to stand out in the chinese market, in addition to doing a good job in brand marketing and providing consumers with a better service experience, they should also invest more energy in the product itself.
uniqlo's window display design attracts consumers' attention.
in terms of product innovation, fast fashion brands are also looking for breakthroughs in many ways. for example, uniqlo has teamed up with the shanghai museum to launch the "museum with innovation: bronze if spirits" utme! customized service series of printed patterns, using clothing as a carrier to convey the heritage and charm of chinese cultural treasures. zara recently announced that it will launch a collaboration series with fashion designer stefano pilati, including 50 men's and 30 women's clothing and dozens of bags and accessories, which is expected to debut in early october.
industry insiders said that young people today focus on appearance and personality expression in clothing consumption. if a brand cannot meet the needs of young people, then the brand will be in danger of being eliminated, and new brands will come from behind.
