Reporter | Zhou Fangying
Edit | Lou Shuqin
1
Recently, Monki, a low-cost fast fashion brand owned by Swedish fast fashion giant H&M, released a store closure announcement at the Tmall flagship store. The announcement shows that Monki will officially close the store from April 1, 2022. Monki's Tmall store will be cleared from March 10 to 31, all stores will be removed from shelves and sales will stop selling from April 15, and customer service will also be closed after April 15.
Source: Tmall
Compared with the two sister brands H&M and COS, Monki has a low presence in the Chinese market.
In early 2015, Monki opened its first store in Dalian, and in the next two years, it opened stores in Beijing, Shanghai, Shenzhen, Xi'an, Kunming and other cities. This is similar to the strategy of the main brand H&M when it first entered the Chinese market. In March 2016, Monki landed on Tmall to open an online flagship store and laid out online channels early.
But at present, Monki only lists nine stores in Beijing, Shanghai, Chengdu, Nanning, Shenzhen and Xi'an on the official WeChat account. Moreover, through the comparison of social platforms such as Dianping and Xiaohongshu, interface fashion found that most of its stores are almost in the state of withdrawal.
Image source: Dianping
According to H&M Group's 2021 financial report, Monki has only 98 stores left worldwide. Monki, which announced its exit from the Japanese market in 2016, had focused its hopes on Europe, as well as Chinese mainland and expansion in Hong Kong, China.
However, under the cold winter of the retail industry swept up by the epidemic, monki's actual development is obviously not satisfactory.
Interface Fashion has reported that Monki has reported the news of withdrawing from the Hong Kong market in China at the end of 2021. According to Hong Kong 01, after the last store in Tsuen Wan Plaza was closed, the clerks could choose to work in other stores under the H&M Group brand.
At present, the information on the Hong Kong market in China can no longer be found on the store list of Monki's global official website, and the Chinese mainland only lists one store in Chengdu.
In fact, from Monki's few messages on Chinese social media, it can be found that the "discount" is the deepest impression that the brand has left on the minds of consumers. The ultimate cost performance is also a strategic policy set at the beginning of the establishment of the Monki brand.
Monki's main price band is basically within 300 yuan, and a few winter coats are priced at more than 600 yuan. Under the discount activities often carried out by the brand, you can actually buy a T-shirt or knit shirt for only a few tens of yuan.
Such a cost-effective place in the Chinese market ten years ago still has considerable advantages, after all, at that time, overseas brands in China is still a new thing.
However, as more and more international brands enter China, and local apparel brands gradually emerge with the help of china's deep supply chain foundation and the development of digital commerce, fast fashion brands are no longer so popular in the Chinese market. In addition, traditional fast fashion brands such as H&M and ZARA are being challenged by ultra-fast fashion brands represented by SHEIN, and the flexible supply chain they develop has become a hot topic in the industry.
Fundamentally, in the case of oversupply, consumers become the party in charge of choice. Moreover, Monki, which is positioned in the youth group, has not opened a significant gap with the main brand H&M in design, and is still dominated by regular models such as T-shirts and jeans.
In H&M Group's 2021 financial report, the Asian and Oceania markets were the only markets to lose. In 2021, the Group's overall performance increased by 6% year-on-year to SEK 199 billion. Of these, only Asia and Oceania saw their performance fall by 8% to SEK 26.3 billion. In the fourth quarter, China, which has always been in the top ten list, became the market with the most serious decline in performance, with sales falling by nearly 40% year-on-year.
Notably, in the Chinese market, H&M Group seems to have shifted its energies to mid-to-high-end brands such as COS, Arket and & Other Stories. In the past two years, COS has continued to expand its stores in first-tier and new first-tier cities, and has increased its investment in marketing activities. Arket and & Other Stories officially entered the Chinese mainland market in the fall of 2021 and are now opening stores in Beijing and Shanghai.
The development towards mid-to-high-end seems to have become a new way for fast fashion giants to seek growth space.
Interface Fashion has reported that according to a report by market research firm Lectra, the two major head brands of ZARA and H&M are turning to increase the use of high-end fabrics such as leather and wool to increase the proportion of high-end products.
This means not only an improvement in the quality of fabrics and craftsmanship, but also an enhancement of the sense of fashion. For example, zara recently partnered with Chinese designer SUSAN FANG for the first time to strengthen the brand's presence in the Chinese market. UNIQLO, which has always been proud of its "big and complete" basic models, is also constantly launching new designer co-branded collections to enhance its own fashion attributes.
It is undeniable that the inherent business models of leading fast fashion companies such as Inditex, H&M, and Uniqlo have been challenged.
Similar to Monki's defeat, Zara sister brands Bershka, Pull & Bear, and Stradivarius also announced their withdrawal from the Chinese market in early 2021. Uniqlo's more affordable GU brands have also been slow to improve in the Chinese market. These smaller fast fashion brands, which are "replaced" as main brands, were clearly expected to become the second pillar of growth of the group. But now it seems that the market does not need ZARA, H&M and Uniqlo's doppelgangers.