The reason why the closure of Zara megastore in China matters (2024)

The fast-fashion giant Zara is making people talk about itself for a few days because of its decision to close its megastore in China. About a week ago, customers who went to the store at Lessen Shopping Centre in Chengdu were welcomed with a banner on the front door, which invited them to go to other Zara stores in Yokado e Sino-OceanTaikoo Li, situated in Chengdu. Since then the news is gone all the way around the world.The closure of the Zara megastore in the Chinese city, where there are now eight stores of the brand, is more important than it appears. In fact, the decision actually refers to the intention of the Spanish group Inditex to launch a “restyling” of the brand, including its repositioning on the Chinese market.But let's go back a second.

The Zara landing to Chinese country happened for the first time in 2004, when the brand opened its first store in Hong Kong, and then conquered also the mainland China in 2006. After five years Zara landed in the city of Chengdu by opening the megastore in question. But, in this story of the conquest of Asian country by Inditex, one of the most important aspects maybe is the sales strategy implemented right away, which saw to prefer the e-commerce rather traditional sales.Despite its 190 stores with Zara sign in China, the group prefered to bid on online sales for this country, increasing definitively its online presence in 2014, when it opened an online store on platform Tmall, an e-commerce website who also includes Nike, Burberry and Gap. This didn't mean the closing of the official website Zara.cn, which however was considered by the Inditex group less effective and powerful for the reinforcing of the brand online.So, the partnership with Tmall has sanctioned the definitive launch of Zara on the Chinese web, but it has also exposed another important aspect of this story: the Zara image in China.The fact that the Spanish giant is less active phisically on the Chinese territory compared to other occidental countries (for example, according to Wikipedia only in Italy we count about 90 Zara and 11 Zara Kids stores) represents not only the autonomy from "real" stores of the online shop, which also appears to be able to build a successful sales strategy, but also its less powerful role of the brand into Chinese fast-fashion.If in our country Zara is one of the most important brands for low-cost fashion, well-known everywhere, maybe in China it's not. It's hard to image it, but in the Asian country Zara is not so popular as we have been used to know. What is lacking is, if I can say so, the tradition and the leadership that the Spanish brand has been able to build somewhere else, considered for years one of the most important names of the international fast-fashion. In China, Zara is one of the many clothing stores in the streets of the cities, without the "iconic" status quo the brand has consolidated in the rest of the world.Returning again to the initial news, the decision to close the megastore in Chengdu has now a new value. It's not a simple closure of a store, but a real marketing strategy, which aims to requalify the brand in China. By entrusting the bulk of the sales to e-commerce an closing the megastore, symbol of a "throw-away" shopping, the Inditex group decided to give Zara a new, unexpected role: smaller and focused boutiques to consolidate the brand as reference point of "traditional" shopping for a more refined target.
The future will confirm or not these hypothesis, meanwhile the idea that in the world there is a place where Zara is not a fast-fashion giant seems like science fiction.

The reason why the closure of Zara megastore in China matters (2024)

FAQs

Is Zara closing in China? ›

While speaking to Daily Economic News, a Zara spokesperson said that the rumour that Zara is withdrawing from China is false.

Why was Zara successful in China? ›

Zara's market strategy into China was focused on differentiation and their short supply cycle. They also focus on putting Zara Home outlets across their major cities. Zara usually puts their stores in either fashionable locations or in classy department stores.

How many Zara stores are there in China? ›

According to the 2023 financial report of Inditex group, as of January 31, 2024, Zara has 1,811 stores worldwide and China has the highest number of 118 stores outside of Spain (261).

Who is the owner of Zara store? ›

Amancio Ortega, the man behind fashion brand Zara, is Spain's richest person.

What is the controversy with Zara China? ›

The Xinjiang region of China produces a large supply of cotton used across the garment industry with “roughly one in five cotton garments… [containing] cotton or yarn from Xinjiang.” The ASPI names brands, such as Zara, as potentially benefiting directly or indirectly from this unfree labour in their supply chains.

Who is Zara's competitor in China? ›

Chinese mass market brands Metersbonwe, Peacebird, Youngor, Mo&Co and Eifini are among the local players competing with global fast fashion brands. H&M and Zara also compete with Chinese brands on platforms like Tmall, Taobao and Douyin that cater to hyper-local trends, fit and consumer behaviour.

Are Zara clothes made in China? ›

While some competitors outsource all production to Asia, Zara manufactures its most fashionable items – half of all its merchandise – at a dozen company-owned factories in Spain (particularly in Galicia), Portugal (northern part) and Turkey.

Where is the largest Zara store in the world? ›

The largest Zara store in the world opened in Rotterdam on Friday. The clothing store, located in a former C&A building on the Coolsingel, covers approximately 9,000 square meters spread over five floors. The massive store fits with Zara's strategy to open more large stores and close smaller ones.

Where does Zara get their clothes from? ›

They use this information to decide what to make each week - Zara's factories will only make what they know will sell. Most of Zara's clothes are manufactured at its sites in Spain or in nearby Portugal, Morocco and Turkey.

Who is the richest owner of Zara? ›

Amancio Ortega is the founding chair of retail giant Inditex, the parent company of Zara, the largest global fashion retailer. He is the wealthiest person in Spain and among the wealthiest people in the world.

Is Zara owned by H&M? ›

Zara jumps ahead of H&M to become second largest apparel brand in Europe. GlobalData's Apparel Market in Europe to 2027 report shows that Inditex-owned retailer Zara has overtaken Swedish fashion retailer H&M to become the continent's second-largest apparel brand, behind sports brand Nike.

What major companies are leaving China? ›

Intel, Microsoft, Nike, and Dell have all recently signaled their intention to move some of their manufacturing out of China to different shores.

Is H&M still in China? ›

H&M products were removed from all major Chinese e-commerce platforms amid the boycott in 2021 after saying it no longer sourced cotton from Xinjiang in response to accusations of forced labour.

Where is the largest Zara store in Asia? ›

Zara opens its biggest Asian store in Beijing.

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