Contrary to the pessimistic economic climate of the luxury goods market, many fast fashion brands are constantly exploring the path of transformation and upgrading and expanding rapidly under the new retail trend. The annual reports of parent companies of major fast fashion brands show that Uniqlo opened 136 new stores in China in 2016, with a total number of operating stores reaching 514, followed by H&M with 444 total operating stores.
In recent years, the retail market has continued to be sluggish, with major first-tier brands and department stores reporting losses or even closures in news reports. Demographic changes, the growth of social media and radical shifts in consumer shopping attitudes are game-changers for the entire retail industry. On the one hand, those born in the 1990s and 2000s dare to express themselves, dare to defy authority, hate being bound by money and status, and disdain to follow others; the younger generation is pursuing far more than just a brand’s LOGO, let alone Simply paying for the brand LOGO; on the other hand, today’s fashion has been completely democratized; consumers now have various channels and can obtain new fashion styles at various price points. As various expenditures in modern life continue to increase and increase, the cash available to individuals at any time becomes shorter. Supporting higher-quality consumption needs at lower costs has become everyone’s desire. Under this current situation, fast fashion has taken advantage of the trend to upgrade and become a new hot spot in the retail industry.
Contrary to the pessimistic economic climate of the luxury goods market, many fast fashion brands are constantly exploring the path of transformation and upgrading and expanding rapidly under the new retail trend. The annual reports of parent companies of major fast fashion brands show that Uniqlo opened 136 new stores in China in 2016, with a total number of operating stores reaching 514, followed by H&M with 444 total operating stores. ZARA’s expansion is currently relatively low-key, but as of now, ZARA has opened 175 stores and e-commerce platforms in 64 cities in China.
Taking this opportunity, the young international fast fashion women’s clothing brand EGO officially entered China at the end of 2016. With its precise positioning in the Chinese market, EGO has quickly opened up the market with its fashionable style, rich styles, excellent quality, affordable prices and meticulous services. In addition, in view of the current situation of large inventory of traditional brand franchisees, EGO brand pioneered the introduction of a fully managed franchise model, which was enthusiastically sought after by franchisees. In just half a year, more than 50 stores have been quietly opened in Shanxi and Henan markets, with rapid growth, and it has become China’s most talked-about new retail brand.
In the “fully managed” franchise model, franchisees do not need to invest time and energy in the daily operation and management of franchise stores. The EGO brand will assign store managers to franchised stores to provide full management. They will also be responsible for store location selection, image design, staff recruitment and training, as well as daily store operations and merchandise management matters, thereby avoiding problems caused by the uneven business capabilities of franchisees. Stores are closed, and goods turnover can be effectively controlled to increase sales success rate.
At the same time, in order to solve the franchisees’ concerns about inventory under the current situation, the EGO brand proposed the concept of zero inventory, and the brand is responsible for the deployment and inventory of all goods. Under this model, franchisees do not need to be responsible for their own profits and losses and absorb unsold goods like the traditional model. This is undoubtedly a favorable decision based on the current market situation. To build a brand, you can only change with the times and follow the trend.
Source: Southern Metropolis Daily
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