Global Fast-Fashion Retailers in China(1)

H&M, the second largest fast-fashion clothing retailer headquartered in Sweden, founded in 1948 followed up a surge from foreign popular clothing retailers such as Zara from Spanish retail giant Inditex, Japanese brand Uniqlo to start its exploration in Chinese booming apparel market as it opened its first flagship store in Shanghai, mainland China in April 2007, just one month later with its first store opening in Hong Kong.

Compared to its global competitors, H&M is not the first mover to dig out most potential development when China opened up its retailer market to global players. For instance, in 2004 Zara already successfully tested water in Hong Kong Territory as opening its first store there while two years later in 2006 caught up the trend and opened its first store in Shanghai mainland China, sitting on the city’s most trendy and prosperous district as its 2,700^th store on the world.

Besides mentioned above Zara brand of Inditex Group sitting in Shanghai and expanding to other Chinese metropolises and wealthy second tie cities, this company was reported have introduced its four brands, including Zara, Stradivarius, Pull&Bear and Bershka into Chinese market. Referred from a local media, Inditex Group is planning to open 120 new stores in China by the end of 2011, among of which are three new stores to offer Zara and other brands.

Mango group, positioning itself as Spanish second largest textile exporter, was founded in 1984 with shops over 68 countries. Early in 1990s, Mango set shops in Hong Kong. In 2002 it entered Chinese fast-fashion market soon it was fast driving to Chinese market with second shop opening in Shanghai financial and upscale district in 2003. Following an aggressive expansion strategy, by the end of 2011 it plans to add up to 220 stores in China. According to a director saying, Mango is aiming to expect 10% of sales profits will come from Chinese market by 2013. The company witnessed incredible growth of Chinese fast-fashion retail market and even built up its own distribution hub in Shanghai in 2006, which prompted the expansion. Mango targets both in Chinese first and second tier cities but with high volumes. Extracting around 3% of annual turnover to put into marketing, Mango’s advertising campaign goes well with the new opening of stores. Plus, the brand regularly advertises on fashion magazines, street boards, shows and events.

Chinese government required a joint venture from global retailers entering market with local companies. For Mango, it is franchised with local companies, mainly asking from $70,000 to $90,000 dollars outlay to be a franchisee with the multinational retailer.