Tuesday, May 21, 2024

How Zara is taking on one of the biggest Chinese online shopping giants Shein | – Times of India

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Zara owner Inditex , the world’s biggest listed fast fashion company by sales, may reportedly have a ‘Chinese problem;. China’s Shein is an online marketplace with no physical stores. Shein’s rapid expansion in the online marketplace has put pressure on major retailers like Inditex and Sweden’s H&M in Europe and parts of Asia. Shein is also the same Chinese e-tailer that has been a major worry for Amazon and other clothing and accessories retail giants in the US.
According to an exclusive report by news agency Reuters, Inditex, the parent company of Zara, is now taking strategic steps to counter the growing influence of the Chinese online shopping rival Shein.Unlisted Shein is the world’s biggest fast-fashion retailer with an estimated 18% market share, according to Coresight Research.
Going Lefties’ way
The expansion of Lefties, which reportedly sells jeans priced as low as under 20 euros and dresses and handbags under 10 euros, is a key part of that strategy. Lefties initially emerged as an outlet for Zara’s excess inventory. It has now expanded its presence to 17 countries, including Egypt, Mexico, Romania, Saudi Arabia, Turkey, and the United Arab Emirates. On paper, the report said that Lefties is still bundled under Zara in Inditex’s financial reports, meaning its results are not public.
Taking on Shein’s biggest advantage: Aggressive pricing
Shein’s impact on the fast fashion market remains a recurring theme in discussions with Inditex management. Inditex aims to find effective ways to compete against Shein’s disruptive pricing strategy while maintaining profitability and market share. While Zara remains the flagship brand for Inditex, Lefties’ growth signifies the company’s intention to capture a share of the budget-conscious market segment.
Lefties’ presence in several emerging markets suggests it is a way for Inditex to serve shoppers who may be less willing to spend extravagantly at Zara. On Instagram and TikTok too, Lefties employs similar strategies to Shein, featuring micro-influencers in most of its posts – in contrast with the high fashion aesthetic of Zara’s social media marketing.
Shein growing, and growing fast
In Portugal, Lefties attracted even more shoppers than Zara last year according to Kantar estimates that have not been previously published. Shein’s shopper numbers in Spain rose to 5.2 million in 2023 from 421,000 five years ago, but the Chinese group is still well behind Zara and Primark, according to Kantar estimates on the market. However, the pace that Shein is growing at has made it critical for Zara management to take notice, and may be rightly so.

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