How to solve the stumbling block of fast fashion?

Just past the "Double 11", the Uniqlo Tmall flagship store hangs out the announcement that the whole store is sold out. This is the first time that Uniqlo has sold out all the goods in the “Double 11” history, and it is still less than half a day after the “Double 11”.

According to relevant news, on November 11th around 0:30, Uniqlo ranked first in the sales of hot industry merchants, behind it is Suning Tesco, Nike, Glory, Xiaomi. This year's "Double 11", Uniqlo created a record of 2 minutes and 53 seconds of sales and broke through 100 million yuan, becoming the fastest brand of Tmall's best category.

However, behind the "Double 11" carnival, it should not be overlooked that the fast fashion fashion giants are now experiencing the pressure of declining performance. "Cheap", "Imitation of big cards" and "quality is worrying" have become a stumbling block for fast fashion. .

UNIQLO parent company's performance decline

Despite the decline in full-year profits, UNIQLO in Greater China was the only region that performed better than expected in the second half of the year.

In the last month, the Uniqlo parent company released the 2016 fiscal year report as of August 31, which recorded a growth in consolidated sales revenue but a decline in profits of more than 50%. The company's revenue increased by 6.2% year-on-year to 178.64 billion yen, gross profit increased by 1.9% to 864.9 billion yen, but operating profit decreased by 22.6%, and the net profit attributable to the parent company was a sharp drop of 56.3%. Operating profit fell sharply by 22.6% to 127.3 billion yen (about 8.2 billion yuan), which was the first decline in the five-year sales profit of the year. Prior to this, the sales report released by Fast Retailing Group in the first half of FY2015 showed that as of February 29, 2016, due to the sluggish performance of Uniqlo, the net profit of the group decreased significantly by 55.1% compared with the same period of the previous year, only 47 billion yen. (about 2.8 billion yuan). Despite the decline in profit for the full year, Uniqlo in Greater China was the only region with better-than-expected performance in the second half of the year. Currently, Uniqlo has more than 400 stores in China. In the United States, Uniqlo's performance in the second half of the year has improved, but the store's impairment loss was recorded, and the operating loss for the whole year expanded.

It has been reported that Uniqlo has promoted business upgrades through price cuts. Fast Retailing Chairman and CEO Liu Jingzheng Liujing stressed that Uniqlo will return to a simple pricing mechanism. Consumers do not agree that new products are equal to high prices. The fashion retail environment is very difficult today. The price increase in the past two years has proved to be a mistake.

According to the plan, Fast Retailing Group will expand its global stores to 3,336 in FY2017, including 837 Japanese Uniqlo stores, 1,104 overseas Uniqlo stores and 1,395 global brand stores, of which UNIQLO International stores will increase by 146. And with the growing trend of e-commerce, Fast Retailing Group has revealed that the company's online e-commerce sales accounted for 5%, and will increase this level to 30% in the future.

To this end, in this year's "Double 11", Uniqlo conducted a "new retail" test. From November 1st to November 13th, consumers purchase "Double 11 Select" to choose their own store, which can be online for more than 400. The store quickly picks up the goods. From November 14th, the UNIQLO Tmall official flagship store will also open the store's self-service, which solves the problem that the express delivery has not been able to wait for a long time.

In addition, in addition to Uniqlo, according to the relevant financial report data released by various brands in 2016, the performance of Gap, H&M and other fast fashion giants continued to decline. According to the financial report released by H&M Group, the company's global sales in September only achieved a 1% growth, the lowest growth rate in the past year. At present, H&M Group has experienced a decline in profits for five consecutive quarters. At the same time, H&M Group's gross margin in the third quarter fell 190 basis points to 54%, compared with 55.9% in the same period last year. In the Chinese market, H&M created an 82% sales growth in 2007, but this figure has fallen to 16% last year.

It is understood that Gap had planned to close more than a quarter of the same-name retail chain last year, and this year announced that it will close 75 Old Navy and Banana Republic stores outside North America. The old fashion fast Mango also plans to close 450 stores in 2016.

Not only that, the clothing products of some well-known fast fashion brands have repeatedly been listed on the unqualified list published by the General Administration of Quality Supervision, Inspection and Quarantine, and the quality problems are worrying.

Consumer aesthetic fatigue seeks personality

Consumers are more pursuing individuality and novelty, paying more attention to product quality, and the appeal of fast fashion is not as good as before.

“Traditional clothing company designers will design new styles for each season, and fast fashion businesses are different. They are designing, processing and releasing new products at any time, as long as there are new fashion trends. They only need to grasp the fashion of top brands. Trends, and then integrate into your own design elements, you can easily get ready for clothing.” This is the definition of a fast fashion brand, from design concept to store sales, the entire process takes only ten days, low prices and new products. It was the main reason for attracting consumers to visit fast fashion chains.

The fast fashion survey from the authoritative organization shows that among the consumer groups that purchase fast fashion products, young white-collar consumers are mostly, and most of the income is between 5,000 and 8,000 yuan, and consumers who regularly buy fast fashion products account for 40.98%.

However, with the explosive development of fast fashion brands, since the beginning of last year, the speed sequela of fast fashion has also begun to be exposed. Consumers are fleeing the fast-moving consumer cycle, buying cheap clothing—discarding and cleaning—and buying again. After the retreat of freshness, consumers are pursuing more individuality and novelty, paying more attention to product quality, instead of simply focusing on price, which makes the appeal of fast fashion not as good as before.

Forward-looking industry research institute pointed out that for the cheap clothing brand, this "fast" positioning has begun to have drawbacks. Fast fashion brands are trying to get out of the cheap and fast frame and develop higher-level market, but the development of the secondary line products. For fast fashion brands, they are still at the stage of testing water. Based on cost control factors, brands are reluctant to supply products that require more high-quality fabrics and design costs.

According to industry experts, fast fashion brands are expanding rapidly in the global market. While harvesting a large number of consumers' consumption and profitability, they also position their own brand in the framework of mass consumption. This is undoubtedly the increasingly personalized consumption. The biggest hidden danger of enterprise development under the trend.