1. There is a “slow down” trend in the fast fashion industry
Fast fashion is a clothing production model that “quickly responds to customers’ fashion and trendy consumption needs” and aims to Optimize the supply chain, shorten the cycle from production to sales of clothing products, and provide customers with fashionable clothing at lower prices. The main characteristics of fast fashion are as follows:
From the perspective of consumer groups, working men and women under the age of 30 who live in first- and second-tier cities and love beauty and social interaction are fast fashion. Main consumer groups. Judging from the age structure, the post-90s generation accounts for more than half, and the post-00s generation is also gradually rising, becoming a new consumer group that cannot be ignored in the fast fashion industry.
In recent years, with the continuous changes in people’s consumption needs, the attractiveness of fast fashion brands has gradually declined, and their excessively fast experience style is unsustainable. As the development of resource- and labor-intensive industries faces difficulties, fast fashion brands’ profit margins are gradually compressed due to the inflexible response of management teams, and their development speed has slowed down significantly.
From the perspective of the number of stores, the number of new fast fashion stores in my country has shown a downward trend in the past two years. According to incomplete statistics, in 2019, 8 fast fashion brands including H&M, ZARA, Uniqlo, MJstyle, MUJI, UR, C&A, and GAP opened a total of 218 new stores in the mainland (excluding upgraded and renovated stores) ), a record low.
2. The reshuffle of China’s fast fashion industry has intensified and domestic brands have squeezed into the top three
The current growth rate of domestic economy and residents’ income Gradually slowing down, consumers are beginning to get rid of their blind worship of high-end brands and high unit prices. As the fast fashion craze gradually recedes, the business growth of fast fashion brands has diverged. In the context of consumers returning to rational consumption, UNIQLO has successfully adapted to consumers’ pursuit of high cost performance and stood out.
In April 2019, “Internet Weekly” and eNet Research Institute jointly released the 2019 fast fashion brand rankings. The list counts 150 fast-moving consumer goods fashion brands. Among them, UNIQLO, ZARA and Handu Yishe are the top three. Among the top ten, the bottom seven are H&M, Adidas, Nike, ONLY, VERO MODA, Semir and Waxbird.
Comparing the rankings of the top five in the 2018 list, Adidas dropped from second to fifth, Handu Yishe squeezed into the top three, and ZARA jumped from third to fifth. Second, the rankings of Uniqlo and H&M remain unchanged.
It can be seen from the list that despite rounds of shuffling, the only domestic brands that can be on the list are the original traditional clothing brands or Handu Clothing House. Tao Tao brand. Local fast fashion brands such as UR, MJstyle, and Hot Wind are still far behind H&M and Zara in rankings.
The ranking of Taobao brands such as Handu Yishe in the third place is related to the increasing penetration rate of e-commerce in my country’s apparel industry and the increasing development of online shopping live broadcasts, especially live broadcasts as a new The traffic track has given birth to goods-carrying anchors such as Wei Ya and Chen Jie Kiki. Through the C2M model, these leading anchors can develop their own products and transform the upstream supply chain, thus seizing a certain market share in the fast fashion industry.
3. International giants are ushering in the trend of store closings. Uniqlo bucks the trend and rises
With the explosion of commercial real estate, international fast fashion The brand is expanding rapidly in China. In 2002, Uniqlo opened its first store in Shanghai, kicking off China’s fast fashion market. A few years later, many foreign fast fashion brands such as H&M, KM, ZARA, Forever 21, etc. also entered China and started an era of “horse racing” that lasted nearly 10 years.
In recent years, due to the sluggish commercial real estate market, the impact of e-commerce platforms and the trend of consumption upgrading, the pace of expansion of fast fashion in the mainland market has been slowing down. 2018-2019 is a watershed for the sales development of overseas fast fashion brands in China.
The business of H&M and GAP in China has declined significantly. In 2018, annual sales decreased by 3.0% and 18.2% respectively. The sales growth of Inditex, the parent company of Zara, also began to slow down to 9.2%. British high street brands TOPSHOP and NewLook announced their withdrawal from China in 2018, and Forever21 announced its withdrawal from China in April 2019.
The outbreak of the epidemic in 2020 and the continued downturn in the global economic environment have intensified the withdrawal of international fast fashion brands. In March 2020, Old Navy, a subsidiary of GAP, announced its official withdrawal from the mainland. Esprit, which followed ZARA’s failure, closed all stores at the end of May, announcing that it would temporarily leave the Chinese market.
Against this background, Uniqlo still maintains an average annual opening rate of 100 new stores, and the number of new stores opened in the mainland has always ranked first among foreign fast fashion brands in the number of new stores opened in the mainland. , the performance is particularly eye-catching. As of May 2020, UNIQLO has opened more than 3,600 stores worldwide (nearly 820 in Japan and about 750 in mainland China).
Compared with European and American fast fashion brands such as Spain’s ZARA, Sweden’s H&M, and the United States’ GAP, Uniqlo, which originated in Japan, has more obvious geographical advantages, culture and body shape The similarity helps Uniqlo better understand the Chinese people’s body shape, and the clothes it designs are closer to the daily life of the Chinese people. The Japanese have always paid attention to details. In order to better explore the Chinese market, Uniqlo even analyzed the differences between southerners and northerners in China to better distribute and promote products.
In the fiscal year 2014-2019, the sales of Fast Retailing Group, the parent company of Uniqlo, continued to grow. In fiscal year 2019, Fast Retailing Group achieved sales of 2.29 trillion yen, a year-on-year increase of 7.51%. Affected by the epidemic, as of May 31, Fast Retailing Group’s comprehensive operating income in the first nine months of fiscal year 2020 was ���1.5449 trillion yen, a year-on-year decrease of 15.2%, and operating profit decreased by 46.6% to 132.3 billion yen.
From a regional perspective, Uniqlo’s international market revenue has overtaken Uniqlo’s Japanese market revenue in fiscal year 2018. In fiscal year 2019, the gap further widened, with Uniqlo’s international revenue exceeding one trillion. Japanese yen, reaching 1.026 billion yen. In fiscal year 2020, revenue and profits in Greater China have shown growth in May and are recovering at a strong speed.
Fast Retailing stated that it is expected that by fiscal year 2022, the revenue of the Greater China market is expected to exceed 1 trillion yen, which is about 33.1 billion yen from fiscal year 2019* **Grew to approximately 65 billion***.
Uniqlo’s rapid success is closely related to the current development stage of China’s consumer market. With the gradual slowdown of the domestic economy and residents’ income growth, consumers are beginning to shift away from high-end brands and Blind worship of high unit prices. While the overall consumption power of middle- and high-income groups is increasing, they pay more attention to the improvement of their own quality of life with high-end products. The era of flashy can consumption is over. Consumers return to rational consumption and successfully adapt to consumers’ demand for cost-effective products. It is easy for consumer companies that pursue this to escape.
In addition, firmly grasping young consumer groups through big-name cooperation models and focusing on technological empowerment are also factors that UNIQLO bucked the trend and rose despite the fatigue of the giants in the fast fashion industry. Important reasons:
4. The sudden rise of domestic brands may usher in a golden decade in the future
In overseas fast fashion While brands are accelerating their withdrawal from the Chinese market, domestic fast fashion brands are gradually favored by more and more consumers. As China’s consumption upgrades, the market influence of local brands is gradually released. Coupled with the mature and large local supply chain, local fast fashion brands and Internet celebrity brands have also emerged through online channels in the past two years. The specific performance mainly includes the following points:
First of all, domestic fashion brands continue to rise and gradually occupy a certain market share in the fast fashion market. In 2018, Tmall’s National Fashion Campaign brought PEACEBIRD, Li Ning, CLOT, JNBY, AngelChen, etc. to the New York Fashion Week. The development of “national fashion” has attracted increasing attention from the industry. Many domestic brands have begun to focus on “Chinese design” through joint cooperation and other methods. Integrate Chinese cultural genes into an international and youthful expression context.
According to the “2020 China Consumer Brand Development Report” by Ali Research Institute, the market share of online Chinese brands reached 72% in 2019; among fast-moving consumer goods, Chinese brands have It has seized the market share of foreign brands in more than 4/5 of the sub-categories.
Secondly, in terms of marketing methods, with the rise of e-commerce live broadcast, C2M and MCN concepts, young people, who are the main force of fast fashion consumption, are also more willing to accept new things, such as Live streaming on Taobao and Douyin, etc., and the pioneering online layout of local fast fashion companies will also promote the structural optimization of industry sales channels. For example, sports brands such as Anta, Li Ning, and Xtep attract consumers’ attention by publishing fitness action instructional videos, live training classes, online sports challenges, etc., and attach online links to purchase fitness equipment.
According to the statistical data of nearly 2,000 samples from first-, second- and third-tier cities in the “Tencent Data Lab: 2018 Clothing Consumer Insights White Paper”, the information acquisition level of domestic clothing is Online acquisition has exceeded offline acquisition, accounting for 56%.
Finally, changes in consumer preferences in the fast fashion industry are also an important reason for the sudden rise of domestic brands. According to data from the National Bureau of Statistics, the number of Generation Z in China has exceeded 226 million in 2019, accounting for 16% of the total population. According to McKinsey’s 2019 Fashion Industry Report, Generation Z will continue to provide a growth rate of 3.5%-4.5% for the fashion industry.
As the consumption power and influence of the Chinese market continue to increase and the cultural confidence of China’s young people increases, Generation Z, which has developed with the Internet, no longer only blindly pursues foreign brands. Instead, they are willing to support high-quality domestic products, which enables the competitiveness of domestic fast fashion brands to continue to improve.
According to relevant research jointly released by Huayang Lianzhong, Huayang Fashion and Sina Weibo, only 15% of Generation Z people have not purchased fast fashion brands in the past year. The average purchase frequency is 12.5 times per year, which is close to that of trendy brands. In the preference ranking of fashion product categories among Generation Z, trendy brands, affordable luxury brands and fast fashion brands rank in the top three, and national brands rank fourth with a ratio of 17.7. “Easy and stress-free shopping experience” is a plus point for Generation Z when purchasing “fast fashion”.
Under the impact of the epidemic, many fast fashion brands that focus on offline stores have suffered huge losses, and the advantages of local Internet celebrity fast fashion brands that rely on e-commerce channels have become more prominent. With the rise of the national trend, the main consumer groups becoming increasingly younger and the changing consumption trends, local fast fashion brands will usher in a broad space for growth and are expected to enter a golden ten-year growth period in the future. </p
