H&M's China market strategy appears to be shifting.

H&M's brand Monki has completely withdrawn from the Chinese market and entered the countdown stage. Both the online Tmall flagship store and offline stores will complete the last day of business on March 31. At the beginning of this month, H&M's high-end second brand & Other Stories just opened its second store in Beijing. With ARKET, & Other Stories, COS and other brand actions, H&M's high-end secondary brand matrix in the Chinese market has gradually emerged.

Not only H&M, but in recent years, fast fashions with the labels of "low price" and "fashionable" have succumbed to China, and high-end seems to be their new way out.

Fast fashion and its "separate" are not fragrant

On March 10th, the official flagship store of Monki Tmall issued a store closure announcement, announcing that the store will be closed from April 1st, and all products in the store will be removed from the shelves and stop selling, and clearance activities will be carried out during the period. Another report said that Monki's last offline store in China in Chengdu will also close on March 31.

Monki entered the Chinese mainland market in September 2012 with its first store in Nanjing. As a girly brand under the H&M Group, Monki is highly recognizable. Whether it is the creation of stores or the design of clothing, it presents a more personalized fashion. The price is also lower than that of H&M, the main brand of the group. Especially in discount activities, consumers can also buy a T-shirt or knitted sweater at a price of tens of yuan, which used to be the cost-effective choice for many young and fashionable girls.

In terms of channels, Monki gradually opened stores in Beijing, Shanghai, Shenzhen, Chengdu and other cities. In 2016, it deployed online channels and opened Tmall flagship stores. However, since last year, the brand has been closing stores one after another.

As early as 2016, Monki, which announced its withdrawal from the Japanese market, once put its hopes on the expansion in Europe, as well as the Chinese mainland and Hong Kong markets. But the fact is that with the end of last year, Monki's last branch in Hong Kong at Tsuen Wan Plaza in Hong Kong ended, and Monki also withdrew from the Hong Kong market and was losing ground in the Asian market. According to Monki's official website, there are currently only 98 stores left in the world.

Not only Monki, but in recent years, "closing stores" has become the norm for many fast fashion brands. Previously, Topshop, New Look, Forever 21, etc. have all withdrawn from the Chinese market. ZARA's sister brands Bershka, Pull&Bear and Stradivarius have also closed offline stores to switch to e-commerce channels.

The former fast fashion giant "goes off the altar", and the reason behind it is inseparable from the preference of the rapidly rising Generation Z consumer group for fashion trends. Simply put, a single "price ratio" has been unable to attract more and more discerning consumers.

Try high-end transformation to break the situation

According to survey data, trendy brands, affordable luxury brands, fast fashion, national brands and sports brands are among the top five in Gen Z's preference for fashion product sub-categories. When low-cost fast fashion is no longer suitable for the current market competition, in order to seek a new way out, fast fashion has embarked on a high-end road.

On March 1, the first store in Beijing of H&M Group's high-end second brand & Other Stories opened, which is also the brand's second offline store in China. On the eve of the National Day last year, & Other Stories opened its first store in China in Shanghai. At the same time, ARKET, another high-end sub-brand of H&M Group, also opened its first store in China in Beijing.

Both focus on "life collection stores", among which & Other Stories continues to create a one-stop shopping experience for Chinese women with a full range of fashion, accessories, underwear, home and lifestyle products; ARKET includes clothing, home products and coffee. Pavilion, bringing consumers a one-stop Nordic lifestyle.

In addition, H&M Group's high-end sub-brand COS is also striving to jump out of the fast fashion circle, emphasizing more classic and simple design and high-quality fabrics, and even launching an independent men's clothing store and introducing the concept of lifestyle. Channels also tend to be high-end malls, and they have now entered shopping malls such as Taikoo Hui in Guangzhou and Taikoo Li Qiantan in Shanghai.

According to the latest news released by H&M, in the three months to the end of February, the group's sales rose by 23% year-on-year, but how much of it came from the high-end second brand is still unknown.

On the one hand, the high-end movement of Inditex Group is inseparable from Massimo Dutti, and on the other hand, it originates from the launch of ZARA's new ORIGINS source series, which focuses on fashionable and high-quality basic clothing, focusing on creating modern clothes for consumers. A wardrobe for living needs. The Fast Retailing Group, represented by Theory, has built an elegant clothing matrix, and with the frequent cooperation between Uniqlo and designers, it has formed a high-end upgrade model of self-operation and acquisition.

However, behind these actions, some problems are gradually exposed.

For example, fast fashion genes, this is an unavoidable identity imprint of high-end second brands. This is especially notable in the "Xinjiang Cotton" incident. Fast fashion brands and high-end line sub-brands that use the same fabric suppliers have been boycotted to varying degrees by domestic consumers. In addition, the quality problems of fast fashion high-end lines have also been repeatedly criticized for this.

The second is homogenization, which is not only the pain of fast fashion, but also the inevitable problem of high-end second brand of fast fashion. When the competitiveness of high-end brands is obviously not obvious, their irreplaceability will become weaker and weaker, and they can be replaced at any time.

All-round adjustment to embrace Generation Z

In addition to the transformation to high-end, in the face of current market demand, the adjustment of fast fashion brands can be said to be comprehensive.

Recently, H&M launched the "H&M with Friends" column on official websites in Sweden and Germany, selling Lee, Wrangler, Fila, Superdry, Crocs, Eastpak, Aimn, Kangol and other brand products. And after this model is tested in Sweden and Germany, it will be extended to the official websites of e-commerce in other markets around the world in the future.

This move is an important step in H&M's transformation to a comprehensive fashion e-commerce platform. At present, online retail business has not only become an important source of sales for fast fashion brands, but also their focus in the present and even in the future. This method is not only more in line with the consumption habits of the younger generation, but also can greatly reduce operating costs.

In addition, noticing consumers' pursuit of "fashionable lifestyle", some fast fashion brands no longer stop at products.

Uniqlo's third global flagship store in mainland China, located in Taikoo Li West District, Sanlitun, Beijing, is positioned as a "composite tomorrow's living center", and it is the first time to open a flower shop in mainland stores. Today, Uniqlo has brought its flower shop to many stores in Shanghai, Guangzhou and Shenzhen.

MUJI has crossed over the fresh food business format, and opened the first fresh food complex store in China in Shanghai Ruihong Tiandi Sun Palace; Gap and Walmart jointly launched the home decoration brand Gap Home, which is listed on Walmart website for sale, and introduced popular products into some lines Xiamen; ZARA entered the field of beauty and launched a full line of beauty products Zara Beauty in the Chinese market...

Of course, returning to products, fast fashion brands are also trying to regain some consumption power from the joint series products and firmly grasp the young consumer group. However, some people in the industry believe that the core competitiveness of fast fashion brands is still quality and price, and maintaining low prices under high-quality products is the way to survive for fast fashion brands.

Although the quarterly reports of many fast fashion parent groups recently show that they are turning the tide, it is clear that they are still facing a lot of pressure in the Chinese market. The rise of domestic products, trendy brands and even niche clothing is a great challenge to it. Fast fashion brands not only need to adapt to changes and keep updated, but also need to integrate with Chinese local culture and business models.