Inditex-Owned Brand Entered Mainland China In 2006#
Now with more than 100 brick-and-mortar locations in more than 40 cities in China, on September 5 the Spanish fast fashion juggernaut
Zara#
will launch its mainland Chinese online store, jumping on the country's multibillion-dollar e-commerce bandwagon. Having entered the mainland China market in 2006, two years after its Hong Kong debut, Zara has capitalized on China's massive demand for foreign fast-fashion brands in recent years. In an astonishingly short time, Zara has built a vast retail footprint throughout first- and second-tier cities throughout China, investing heavily to take on home-grown Chinese competitors as well as global rivals like Japan's
Uniqlo#
(which is also engaged in China's e-commerce market via an official Tmall store), America's
Forever 21#
and Sweden's
H&M#
.
With its foray into China's young and crowded yet booming e-commerce market, Zara apparently hopes to take advantage of the rising popularity of online shopping among urban white-collar shoppers and those in third- and fourth-tier cities currently without physical Zara locations.
According to a company release, Zara's mainland China online store will price items the same as at its brick-and-mortar locations, with shoppers having the option of home delivery or in-store pickup. The retailer will also list a toll-free customer service hotline for shoppers to reach a dedicated China help desk. Deliveries come in specially designed eco-friendly packaging, and will ship for a flat 10 yuan (US$1.60). Delivery times range from 2-3 business days to cities like Beijing and Shanghai to 5-7 business days to customers in Xinjiang and Tibet. Along with the e-commerce launch this week, Zara will also release a new mobile app for the China market, which includes online shopping capabilities and lets shoppers scan tags at Zara locations to check online availability.
Despite Zara's bullishness about China's e-commerce market, we'll be curious to see whether its online expansion proves profitable. As Jing Daily noted last month, fast-fashion and discount retailers typically operate at razor-thin margins in China's online retail market, with customers expecting special perks, deep discounts, and online exclusives. Rather than engaging in race-to-the-bottom price wars, retailers entering the China e-commerce market now are adopting the relatively new "O2O" (online to offline) model, an “authentic and full-price” business model.
So far, retail giant
Macy’s#
has invested US$15 million in the domestic Chinese online retailer VIPStore and is on track to launch sales on VIPStore’s luxury site,
Omei.com#
, in spring 2013, delivering “original priced” goods that are timely, exclusive, and readily available. As Jing Daily pointed out this past spring, American luxury retail group
Neiman Marcus#
is also set to kick off its own China expansion with a US$28 million investment in the privately held e-commerce company Glamour Sales Holding by the end of this year.