Major apparel brands bank on China for success

Updated: 2015-08-26 07:25

By Emma Gonzalez(China Daily)

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"Inditex and H&M China currently represent only a limited percentage of their total global sales," said Rossington. "As of June, our analysis suggests that Inditex and H&M derived about 8 percent and 5 percent from China, respectively."

This reflects that there is still room for more openings to reap further gains in the Chinese market.

Jessie Qian, partner and head of consumer markets at KPMG China, noted: "Many of our clients are looking at more investments in China. The country is still expecting a lot of middle-class income increases in the next four-five years."

Additionally, their flexible approach to online shopping has been crucial for their success.

The e-commerce sector in China is a segment of the retail market that is unusually large, affecting the way brands plan their online shopping strategy.

The expansion of brick-and-mortar stores has been crucial to build brand awareness but has been insufficient to satisfy the massive demand for affordable fashion.

"If you look at the retail industry in China, physical outlets might only grow in single digits each year according to industry estimates. However, e-commerce outpaces that growth, almost doubling that number," said Qian.

Online stores help retailers to reach new audiences, especially those living outside major cities who long for fashionable garments just as much as their peers in Beijing and Shanghai.

Tom Gadsby, retail analyst at United Kingdom-based equity research firm Liberum, said: "A combination of brick and mortar stores and a strong online presence is likely to be the long-term winner."

For the remainder of the year, Inditex says it will continue to focus on its online strategy.

Pablo Isla, chairman and chief executive officer of Inditex, said: "A step in this direction is the launch of Zara online sales in Taiwan, Hong Kong and Macao in the autumn/winter season."

Its casual brand Pull & Bear will also start selling online in China from Sept 8.

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