Under the epidemic, the clothing retail market in the fashion industry is also quietly changing. Before the end of this year, Zara will build a 64,000-square-meter online live broadcast room at its headquarters. In order to save the depression of offline retail, Zara decided to actively save itself from online sales channels.
As one of the world’s largest retailers, Zara’s parent company Inditex has been hit hard. Inditex, which has never experienced a loss before, suffered a single-quarter loss for the first time this year. The market value of Japan’s Fast Retailing Group, the parent company of Uniqlo, is quickly approaching Inditex. In 2017, the market value gap between the two was 4 times that of Fast Retailing Group; now, it has narrowed to 1.4 times. No wonder someone joked: “Uniqlo will make Zara unable to sleep.”
Founder of ZARA Amancio Ortega surpassed Bill Gates in 2015 to become the world’s richest man. He led Inditex and its multiple brands to the top of fast fashion in the world. However, the black swan of the epidemic made Inditex unable to hold on. In the first quarter, group sales dropped sharply by 44%, and gross profit margin dropped to 58%. It also recorded the group’s first loss in the world, with a total loss of 409 million euros (approximately 3.2 billion yuan). Inditex, the parent company of Zara, has reported that it plans to permanently close 1,000 to 1,200 of its stores, equivalent to 13% to 16% of its total global stores.
(8 brands under Inditex, the most famous of which is zara)
As the richest man, his business thinking is naturally flexible and flexible. Amancio has decided to close up to 1,200 physical stores in the next two years, shift the focus of operations to online operations, realize e-commerce transformation, and invest over 10 billion in the digital field.
And we do it just as we say, adapting measures to local conditions. Zara’s China strategy is to keep up with the trend of live streaming sales. During the previous mid-year sales event, more than 200,000 people stayed in Zara’s live broadcast room in order to grab discounted clothing.
In order to save the depression of offline retail, Zara decided to actively save itself from online sales channels. . Before the end of this year, Zara will build a 64,000-square-meter online live broadcast room at its headquarters.
In addition to the epidemic, the decline of Zara and the fast fashion market behind it is also the reason for its declining sales and profitability. Zara officially entered China in 2006 and became a hit. On the opening day of the store in Shanghai, fans lined up 200 meters long, setting a record of daily sales of 800,000 yuan. But starting in 2017, Zara’s decline in China began to show. Including the closure of flagship stores in Chengdu and Beijing.
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What’s wrong with Zara?
Fast fashion aims to be fast and cheap. But compared to HM in the same category, Zara’s prices are still too high. The high price is compared with the low quality. It is not uncommon to complain about the quality of Zara clothes, and you often search them. Not to mention the style, fast fashion is all “copied from the same family”.
More than a dozen years ago, Chinese consumers would still buy foreign goods because of poor information and Filters, favor Zara. However, with the changes in China’s consumer groups and the transformation of the competitive landscape, it is difficult for Zara to retain the hearts of those born in 1995 and 2000. This group of young people have more choices. In addition to the convenience of overseas shopping and the presence of many foreign brands, domestic brands such as Six Rabbits and Ubras are also on the rise. Zara’s old user base, those born in the 1970s and 1980s, have become the backbone of the economy and care more about quality and design.
Can Zara, which has no store before or behind it, successfully save itself? Selling goods through live streaming is not a panacea. We still have to start with positioning and quality. </p
