Zara expansion in China

1 January 2017

Zara is the flagship chain store of Inditex Group owned in Spanish. Inditex takes a step forward in its expansion in China. Zara opened its first store in this country in May 2004 at the IFC mall, Hong Kong, where it now has five stores. In February 2006 the first store was launched in Shanghai, in Nanjing Xi Lu, followed by a second one in this city located at Times Square mall. In February 2007 The Inditex Group already opened its first Zara store in Beijing, located at The Place shopping mall. The store has more than 1,500 m2 of retail space spread over two floors.

The Inditex Group is present in 64 markets in Europe, the Americas, the Middle East, Asia and Africa, with upwards of 3,100 stores. In the Asia-Pacific area, Inditex is present with 59 stores in China, Japan, Malaysia, Singapore, Thailand, Indonesia and the Philippines. Zara has developed a unique business model which is needs just two weeks to develop a new product and get it to stores and launches around 10,000 new designs each year (fast fashion).

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Zara is vertically integrated retailer and control every step of the value chain; only cloths with a longer shelf/ fashion life time are outsourced.

Zara acknowledges as one of the “largest, fastest growingand successful” clothing retailers. Zara’s success story begins by offering a product range capable of catering for men, women and children, providing affordable and stylish clothes whatever the season. Coupled with this, is their keen eye for discovering new fashion trends and translating these trends from the catwalk to the high street, both quickly and affordably. Zara boasts a marketing strategy of firstly product variety with a focal point of ensuring speed to market. Finally, store location, as any marketing is left to store location rather than advertising.

Opting for a strategy of minimal advertising provokes the consumer into having to visit their stores. Securing a foothold in as many markets as possible with the intended outcome of building brand awareness and an increased market share has resulted in Zara developing their brand, launching Zara Home. H&M Hennes & Mauritz (H&M) is a Swedish clothing company, known for its fast fashion clothing offerings for women, men, teenagers and children. H&M does not own any factories; instead H&M buys cloths and other items through an abundance of detached suppliers.

Unlike many retailers, who change their collections on a seasonal basis, stores like H&M replace their stock every six to 12 weeks. This “fast fashion” is effective in maintaining customer interest because each time they visit the store it has a different feel. In 2007 H&M successfully launched in China. The first mainland China store opened in Shanghai in April 2007 and since then 14 new locations have opened in southeast China. In 2009 finally come for H&M to open its first store in Beijing. The brand new store is located at Qianmen Avenue, a newly developed shopping area in the very heart of the cultural capital.

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