China’s domestic casual wear industry is facing a challenge that is beginning to look like the inventory crisis of the past couple of years.
This time, however, their troubles are magnified by the threat of foreign competition.
Domestic apparel brands such as Metersbonwe (002269.CN) are grappling with excess inventory, forcing them to scale back at a time when the big four fast fashion houses — H&M, ZARA, GAP and UNIQLO – are digging in for a bigger chunk of the market, 21st Century Business Herald reports.
A survey by Linkshop information website shows UNIQLO with 231 stores in the mainland, followed by H&M with 151, ZARA with 136 and GAP with 63. On average, they are adding one new store every 2.5 days.
They have cornered a big slice of the market in major cities with a strategy that combines speed in getting deliverables to market, a more diverse product line and low-cost design.
Now they’re muscling in on lower-tier cities, home to most of the country’s leading domestic brands.
It’s not for lack of trying that domestic players have been struggling to compete.
Li Ning Co. Ltd. (02331.HK) is one of the latest to test the fast fashion waters. It has managed to reduce its product cycle — from design and production to sales — to just 60 days but it’s nowhere near that of the big four.
Then there is choice. ZARA offers more than 20,000 new products a year, or 56 pieces a day on average, something its domestic rivals are hard put to match.
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