Why are foreign fast fashion brands not so popular? The number of stores has significantly decreased

How long has it been since you visited a foreign fast fashion brand store? Have you noticed that there are fewer fast fashion stores in big cities?

In June this year, the flagship store of Swedish fast fashion brand H&M located in Taikoo Village, Sanlitun, Beijing was officially closed; Previously, H&M's flagship store on Huaihai Middle Road in Shanghai has also closed, making it H&M's first store in the Chinese market. Not only H&M, but also Spanish brands ZARA and American brands GAP have closed multiple stores in big cities in the past two years.

What changes in consumer preferences are reflected behind this? What is the direction of China's clothing retail market?

Upgraded consumer demand leads to "aesthetic fatigue" in fast fashion

It is understood that "fast fashion" originates from the European concept of "FastFashion", which refers to the production and operation mode of some brands that revolve around the latest design of the current fashion week, process and produce at low production costs, and quickly enter stores for sales, allowing customers to quickly feel the latest international fashion trends. In the United States, "fast fashion" is also called "SpeedtoMarket", which is often compared with McDonald's style fast food.

Over the past 20 years, foreign fast fashion brands have quickly seized the Chinese market with advantages such as low prices, diverse styles, keeping up with trends, and fast updates. At present, foreign fast fashion brands such as H&M, ZARA, GAP, etc. still have a high level of popularity among consumers, but their popularity is not as high as before. In the interview, multiple consumers mentioned that these fast fashion brands are unable to meet the new needs of consumers in terms of quality, style, personalization, and green environmental protection.

Ms. Zhang, a 43 year old resident of Urumqi, was a loyal fan of ZARA. "When I was around 30 years old, I often visited ZARA, almost once or twice a month. The price is not expensive, and the style is very suitable for work, both simple and fashionable." However, in recent years, the frequency of consumption has significantly decreased. Ms. Zhang said, "After turning 40, I no longer pursue how fashionable clothes are, but have higher requirements for the quality of clothes, such as fabrics and cutting. These are not what fast fashion brands focus on, so naturally they are not in the scope of my consideration."

Generation Z pays more attention to personalized design, and many people are not very interested in fast fashion brands that are prone to collision. "Although ZARA and H&M are on the fast track, they lack some unique design sense and are more inclined towards daily leisure." said Miri, a post-00s from Shanghai University of Political Science and Law. "My friends around me are all Generation Z, who grew up in a diversified environment and pursue personalized clothing.". "We all prefer niche trendy brands like Bosie or PSO, which have more brand recognition and can showcase unique taste," said Miri.

Fast fashion emphasizes "fast", with fast updates and updates. As consumers pursue green environmental protection, this production model is also being challenged. Yu Wenwen, who works in the education industry in Jinan, Shandong, said, "The clothing industry is an industry with high water consumption and carbon emissions, and the fast fashion production rhythm will bring a certain load to nature. These clothes are thrown away after wearing a few times, causing a lot of clothing waste." She practices the concept of minimalism, adding only a few clothes every year, and is committed to creating simple, versatile, and high-quality "capsule wardrobes.".

Some consumers also believe that some foreign fast fashion brands have insufficient research on the Chinese consumer group, which affects brand loyalty. Chen Changxu from Shenzhen, Guangdong always finds it difficult to choose clothes when entering a fast fashion store: "There is only one size information on the price tag, and there is no indication of shoulder length, chest circumference, waist circumference, or clothing length. He often has to try on several sizes one by one. The European and American styles tend to be loose, and although there are many sizes available, some clothes always fall short of a perfect fit, requiring people to adapt to the clothes."

Sinking+high-end, brands seek new growth points

Multiple well-known fast fashion brands are closing their stores one after another, causing consumers to question: Will foreign fast fashion brands withdraw from this?

Wang Peng, the relevant person in charge of H&M Greater China, said, "When discussing the future of fast fashion, the first thing we should clarify is that the fashion industry will never disappear, and what needs to be iterated and updated is definitely its development mode."

It is understood that foreign fast fashion brands are striving to change and making new strategic adjustments.

Adjust the store layout and focus on the lower tier market. H&M stated that they will continue to rebuild and adjust their stores in 2023. The group plans to open 100 new stores and close 200 stores annually, resulting in a net reduction of around 100 stores. Among them, most new stores will be opened in growth markets such as second - and third tier cities, while closed stores will be concentrated in more mature markets.

"A new H&M store has opened near my home, which is both fashionable and practical for newcomers to the workplace, and I really enjoy shopping." Ma Ya'an, who just graduated from college, returned to her hometown of Lanzhou, Gansu to work. She said that compared with first tier cities, there are some differences in clothing brands' styles and designs in shopping malls in second and third tier cities. When the prices are similar, she tends to lean towards fast fashion brands such as H&M. "These foreign fast fashion brands are less prone to falling short in style design and are suitable for daily casual wear."

Introduce new brands under the brand and focus on the high-end market. In recent years, ZARA, H&M and others have focused their attention on their brands, seeking new growth opportunities. COS,&OtherStories, and ARKET incubated by H&M Group have successively entered the Chinese market. Among them, Arket opened its first offline store in China in September 2021, and OtherStories settled in the Taikoo Li store in Sanlitun in February 2022. The first quarter report of H&M 2023 fiscal year shows that brands including COS, Monki,&OtherStories, and ARKET have shown strong development momentum during the period and are making increasingly important contributions to the development of the group. Among them, COS has upgraded its product range and strengthened its positioning in the high-end market.

Fashion industry brand expert Yang Dayun believes that "with the changes in people's consumption levels, it is a good choice to focus on the high-end market. China's high-end market has considerable consumption potential, which also helps to increase brand added value."

Develop online operations. Famous foreign fast fashion brands have joined e-commerce platforms such as Vipshop and Tmall, and opened social media accounts on Xiaohongshu. H&M Group's report for the first half of fiscal year 2023 shows that while the number of physical stores has declined, the number of online stores during the COS period reached 47, an increase of 9 compared to the same period last year. At the beginning of this year, ZARA launched live streaming with goods in Tiktok, which is the first cooperation with a third-party e-commerce platform since ZARA entered Tmall in 2014.

"To meet the diverse needs of contemporary young consumers, fast fashion brands need to pay attention to the combination of online and offline diversified channels, accelerate online layout, adapt to changes in China's consumer environment, in order to enable enterprises and brands to grow sustainably in the long term." said Cheng Weixiong, a brand management expert in the footwear and clothing industry and founder of Shanghai Liangqi Brand Management Co., Ltd.

New brands quickly enter the market, making the Chinese market highly attractive

At a time when old brands are showing signs of fatigue, new brands are accelerating their entry into the fast fashion field.

Among them, there are brand new foreign brands. Chuu, a sweet and cute Korean fast fashion brand, has a comprehensive layout in major commercial districts of first tier cities in China. In 2021, Chuu opened its first store in China, and by January 2023, the number of Chuu's stores in China had reached 141. Brandy Melville, an Italian fast fashion brand positioned as a sweet and cool girl style, is also highly favored by young Chinese people. After entering the Chinese market in 2019 and opening its first store in Shanghai, Brandy Melville opened its second store in Sanlitun, Beijing in May 2021, maintaining a high level of popularity.

Chinese fast fashion brand URBANREVIVO is also quietly rising. Our core advantages, such as rich products, fast updates, and affordable prices, make UR stand out in the fierce fast fashion industry. In terms of brand style, UR adheres to localization and innovation, and the style and design details are more suitable for Chinese people. In terms of product updates, UR focuses on tracking trends and hot topics. It is understood that its update frequency is maintained at twice a week, and the number of styles developed in a year is 12000.

Taobao brand is forming a force that cannot be underestimated. These brands have borrowed the fast selling model of foreign fast fashion brands, combined with the mature domestic production and supply chain system, to create an operational model with local advantages. With the formation of new industry formats, consumer consumption behavior is gradually shifting to online, which has led to the continuous growth of thousands of "Taobao brands" on e-commerce platforms.

Yang Dayun believes that: "ZARA and H&M are fast fashion brands that entered the Chinese market at the beginning of this century, and the new generation of fast fashion brands that have grown up in the context of mobile Internet can better adapt to the new changes in the Chinese market, use digital technology to form price, speed and cost advantages, so that consumers have more diverse choices, which naturally affects the competitive situation of these brands."

"As a traditional fast fashion brand, it is necessary to see clearly that the Chinese market has entered the era of omnichannel branding, and relying solely on offline physical business models is no longer able to meet the needs of young consumers with multiple touchpoints." Cheng Weixiong believes that "the definition of foreign 'fast food culture' for fast fashion products cannot be simply copied and pasted in the Chinese market. Instead, it is necessary to combine the preferences and style needs of Chinese consumers, and do a good job in product research and development and procurement." In his view, the Chinese clothing market has a large capacity and a high acceptance of new brands and new fashion. This not only brings unlimited opportunities to enterprises, but also means fierce competition, and continuous optimization and adjustment are needed to meet the needs of consumers for rapid upgrading. ".