H&M, Zara Accelerating Retreat, Fast Fashion "Crown" Changes Ownership Again?

Consumer Staples Author: Yunfeng Zhang Jun 14, 2023 06:05 PM (GMT+8)

Not only H&M, but also Zara, Gap, and other fast fashion brands have lost the Chinese market, and more brands such as Top Shop and A&F have left the Chinese market.

HM Sanlitun store shows fashion clothes and models

Behind the young people chasing the trend is the rise and fall of one group of trendy brands after another. Take H&M for example, the Swedish clothing brand that was originally popular with young people, since 2019, one after another stores that could not make money in China have been closed. In the three years 2019-2021, the number of closed stores has exceeded 75. Last year, H&M closed its first store in China.

But young people don't seem to have much emotion about the retreat of this group of fast fashion brands. They don't even have time to react, and their eyes are already occupied by a new batch of trendy brands. In the cycle of fashion, no brand can be favored forever.

Closing stores has become the norm for H&M in the Chinese market in recent years. In 2019, H&M began to close its stores in China one by one. 2019-2021, three years, H&M reduced 75 stores in China.H&M officials said this year, 2023 will continue to store reconstruction and adjustment, the group plans to open 100 new stores annually, and close 200, a net reduction of about 100 stores.

There is never a shortage of clothing brands in the mall, and as soon as the old fast fashion brands of H&M recede, a new group of trendy fashion brands will crowd into the mall. Young people's attention does not stay with one brand for too long, there are always new fashion brands waiting for them in the mall.

Urban Revivio (UR), a local fast-fashion brand, has overtaken foreign brands in recent years to become an unmissable presence in the mall. This year, UR ranked No. 1 in Tmall's apparel industry in the 4-hour sales report on the first day of Tmall's 618 madness. Last year, UR also overtook Uniqlo to become No. 1 in the women's apparel category. Among all the brands, UR is one of the few local fast-fashion brands that has landed in more than 100 cities.

Compared to brands that have been in malls for over 10 years, in the past year or two, Korean fast fashion brands such as CHUU, NO ONE ELSE, and Nerdy have started to occupy offline malls and capture the youth market.

But fast fashion always changes faster than expected. While CHUU relies on bright colors to attract young people's attention, Korean fast fashion brands have already started to experience word-of-mouth cracks as they expand in China. Compared to traditional fast fashion brands, CHUU's prices are higher, basically staying between 200-600 RMB. Young girls have long been picking up CHUU's OEMs and sharing them on social media platforms to get good-looking clothes at a lower price. In the eyes of young people, there are higher quality options available at this price point, it's just that no one can replace CHUU's style for now.

No one style of clothing can always dominate a young person's closet. In the world of fast fashion, the crown is always changing, and the iterations are getting faster and faster. How long can CHUU, which temporarily won the top spot, stay trendy this time?