Fast fashion giants H&M, Zara and Topshop put pressure on Aussie retailers
The entry of fast fashion giants H&M, Zara, Topshop and Uniqlo into the Australian market has given Australian consumers "runway fashion" at an affordable price, at the same time putting competitive pressure on local retailers, according to IBISWorld.
Fast fashion giant revenue in Australia is expected to grow by an annualised 8.7% over the past five years through 2013-14 to $1.1 billion. In comparison, the Australian retail industry revenue is expected to fall by an annualised 0.9% to $12.8 billion in 2013-14.
The concept of fast fashion refers to trends “straight from the latest runway shows”, as fast fashion retailers provide these trends at an affordable price within just a few weeks to the market.
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Australian retailers - Myer, Dotti, Sportsgirl, Just Jeans, Witchery and Portmans - often struggle to compete with the brand power and competitive pricing schemes of these global fashion giants and are losing market share.
IBISWorld’s industry analyst Lauren Magner said while global retail chains initially overlooked Australia as a potential market due to its geographic remoteness and relatively small consumer base this is no longer the case. “The influx of global retailers and the insatiable appetite of the fashion-conscious consumer have boosted demand for the fast fashion industry in Australia.”
Magner said existing local clothing retailers are expected to shift their focus to customer service and in store experience in an attempt to generate sales and win back market share from international brands. “Domestic retailers do have some advantages over global chains – they have better knowledge of the local market and consumer tastes, as well as an established customer base and prime store locations.”
Magner advised that as local operators become better able to exploit these advantages, the clothing retailing industry is forecast to return to growth over the next five years.