Forever 21, A Fast Fashion Brand That Once Lost The Chinese Market, Is Trying To Make A Comeback

Forever 21, a fast fashion brand that once lost the Chinese market, is trying to make a comeback through e-commerce.

The brand, founded by South Korea's Zhang Dongwen and Zhang Jinshu, has rapidly become one of the global fashion chain brands due to its low price and high speed. In the city's core business circle, you may have been attracted to stop by its three story boutique.

We all know the story later. Zara, H & M, gap and other fast fashion brands have fallen into the performance quagmire, and the style iteration is not fast enough, and the cost performance ratio is not high enough, so they gradually lose their attraction to Chinese consumers. First, in April 2019, Forever 21 announced the closure of tmall's flagship store and China's official website, and then launched the clearance sale mode of offline stores, leaving stripped models and empty shelves.

Two years later, on August 4, Forever 21, which had been silent for a long time, released a statement through its official microblog, saying that the US headquarters officially authorized Xusheng Co., Ltd. and its subsidiary Xusheng electrical (Shenzhen) Co., Ltd. to be fully responsible for all operations in China. At present, brands have entered vipshop and pinduoduo, and tmall flagship stores and large-scale physical stores in major cities in China are also under preparation.

But then it deleted it. The most recent one is from 2019.

"E-commerce online" found that the main operator of Forever 21's official blog is Xusheng electric appliance, while its operating companies on pinduoduo, vipshop and tmall are different, and they are several unrelated companies.

The reporter also tried to contact Xusheng electrical appliances, the main operator of the official blog. The company, which mainly produces electrical appliances and household products, has obtained the brand authorization of Hello Kitty, M & M, big mouth monkey, SpongeBob and navigation king. But no response has been received. It is reasonable to speculate that the brand side thinks that the preparatory period should be low-key, or it may be because there are too many operators at present, which makes it inconvenient to make a statement.

In a word, Forever 21, which used to be a bustling shop with offline stores in the core business district, now portrays it more like "don't shoot, quietly enter the village".

Multi channel, multiple operators

If it was not for the gold label of "official" beside the shop, the two flagship stores opened by Forever 21 in pinduoduo could easily be mistaken as "Shanzhai".

More than 1000 people have paid attention to the women's clothing store named "Forever 21 flagship store", with more than 11000 pieces put together. There are 48 SKUs in the store, of which 41 are pants. The price of all the goods in the store is within 100 yuan, 58 yuan to 98 yuan. Most of the product photos are distorted. Although the brand logo is pressed, the texture is not high-level. The models are either not exposed or Chinese faces. On the whole, it is more like a shop opened by a clothing stall in Guangzhou or Hangzhou.

Although there is a poster and brand introduction of Forever 21 on the front page of the store, both the form of product picture display and the clothing style are far from the original style of Forever 21. Although it is a cheap brand, the black logo on the yellow background, as well as the groups of foreign young people often shown in the pictures, always show their youth and vitality.

The shop style of Forever 21 at vipshop is much younger and fashionable, and the price ceiling is higher: from the basic T-shirt of 29 yuan to the French dress of RMB 339 yuan, some styles are still exclusive contributions of vipshop, and the photo texture is relatively high. This is closer to what we used to know as Forever 21.

Although according to the information released by the brand, its tmall flagship store is still under preparation. However, "e-commerce online" found a new store called "Forever 21 men's wear flagship store" on tmall, with only 33 fans at present.

This tmall store is still in the state of "blank room". Before that, a large number of new products were launched on July 16 and July 23, but there is no transaction record at present. Even the logo is just a temporary "Taobao".

On pinduoduo, vipshop and tmall, Forever 21 has different price positioning and style. In fact, they are not run by the same company. The pinduoduo operator of Forever 21 is a Guangzhou trading company named "yaxie", while tmall store is operated by a Hangzhou clothing company named "Suiyuan".

According to the enterprise investigation, the two companies are not related. Vipshop's flagship store operators were unable to verify.

Forever 21 hands over the brand authorization and store operation rights to Chinese companies, which is the same as that most overseas brands will find a service provider to operate on behalf of the Chinese market when they are in the Chinese market - the latter is more familiar with the Chinese market and is familiar with the complicated and detailed e-commerce platform rules. For brands, they do not need to end up, but also a more cautious attempt to lightweight.

Embarrassing Forever 21

It may sell well, but it can also cause problems.

There are some overlaps between the clothes sold by vipshop and pinduoduo, but the price difference is huge: for example, the price of a girl's half sleeve with chest is 74 yuan, while that of pinduoduo is 99 yuan. Another pair of high waist love jeans, the two platforms also have a price difference of 4 yuan.

The price difference of different channels will disrupt the original price system of the brand, and the value of stores on different platforms will also affect consumers' original cognition of Forever 21. It is a kind of consumption to the brand.

In fact, after entering the Chinese market in 2012, it has never gained an advantage in the Chinese market. Many media have analyzed what it did wrong when Forever 21 withdrew from the Chinese market

When the first three-story shop opened on Nanjing East Road in Shanghai, Forever 21 had set off a boom. However, when it entered the Chinese market, it had already missed the first mover advantage, and the discourse power in the field of fast fashion has been firmly grasped by Zara and H & M. Later, it lost its appeal to Chinese consumers because of quality problems and style tailoring that did not conform to Asian body shape.

It is also far less competitive than INDITEX, Zara's parent company. Today, it has only more than 600 stores worldwide, and INDITEX has contracted, but it still has more than 6800 stores worldwide. Zara's global stores alone are more than three times that of Forever 21.

In February 2020, Forever 21 was acquired by a consortium composed of Simon real estate group, Brookfield real estate company and brand management company ABG for a low price of US $81 million. With strong support and sufficient ammunition, more importantly, China has a clothing market of over 1.6 trillion, and no one wants to give up this huge gold mine. That's why Forever 21 has always wanted to make a comeback.

Fast fashion coming back?

Forever 21 is not the only fast fashion brand to survive.

According to yingshang.com, in the first half of this year, fast fashion brands accelerated the pace of opening stores: mjstyle, UNIQLO, ur, Muji, C & A and gap opened 126 stores in total. Especially in the second quarter, it showed an explosive growth with 98 stores, reaching a new high in nearly four years.

"E-commerce online" believes that the increase in the number of stores does not mean that the traditional fast fashion brands that once occupied a large number of women's wardrobes can still regain their former glory.

There are several reasons——

1. The share of traditional fast fashion is shrinking: brands with the label of "fast fashion" hope to eliminate misunderstanding; The changes of the founders of the supply chain and clothing industry will bring about the outbreak of new clothing brands in China.

UNIQLO, which has the second largest number of stores, is actually not a fast fashion brand.

It's not fast and it doesn't catch up with fashion. Take Zara, once a fast fashion company, as a reference. With 20000 pieces a year, it only takes 15 days for a garment to be designed, produced, transported and sold. H & M takes about 20 days. UNIQLO only has 1000 items a year, and it takes three or four months from production to launch. UNIQLO has also been getting rid of the "fast fashion" label, emphasizing that it is a technology company that constantly innovates fabrics.

MUJI is going another way. It does not win the brand of consumers by endless iterations of styles. The core items are always centered on personal care, stationery, bedding and other lifestyle. MUJI's parent company, Nippon Keiko, clearly proposed on July 21 that it would speed up its pace in the Chinese market: starting from fiscal year 2024 (up to August 2024), it will open 50 stores in China at twice the current speed every year, and set up a management team responsible for China business.

Lu You, the general manager of tmall fashion shoes and shoes, mentioned to e-commerce online the changes he had seen in the industry in the past decade: unlike those entrepreneurs from factories, supply chains or retails 10 or 20 years ago, more entrepreneurs from advertising media, cultural trends, and even mobile phone and computer industry came from across the border.

Their core characteristic is that they can tell brand stories better than in the past, and they can also make full use of the mature Chinese clothing supply chain to complete their design and products.

Although cosmetics and food were the first industries to produce a large number of new brands in the whole consumption field, this trend then extended to fast consumer industries such as laundry and personal care. Now, the outbreak of new clothing brands takes the lead in the underwear industry, such as uberas, which focuses on no size underwear; banana, which focuses on technology fabrics; and plain muscle products that use "silicone jelly strip" to replace steel rings for underwear support. The commonness of these underwear brands is to capture consumers with more attractive concepts, and to seize investors with standard products that can be mass produced.

Luyou believes that after underwear, the outbreak of new clothing brands will appear in men's wear, women's wear, shoes and other industries.

2. The power of several major players will rise and fall, especially when patriotism can already drive a business. If the style and price positioning of foreign and domestic brands are consistent, domestic brands will be more naturally recognized by consumers.

Among the top three brands in the number of stores, mjstyle and ur rank first and third respectively, both of which are domestic fast fashion brands.

Although these two brands have been taught by Zara and H & M, at least in China, fast fashion brands represented by ur have shown the strength to compete with Zara“ Lu Xi interview notes "an article in 2019 mentioned that ur is calculated in days from design to shelf. The replenishment cycle of a store (from finding out of stock - placing an order with a factory - putting it on the shelf again) only takes 10 days. It's probably faster than Zara.

The two teachers of ur, Zara and H & M, adopted a policy of contraction last year to close all brands in China, and the other was boycotted by consumers due to the Xinjiang cotton incident. The number of stores opened by the two brands in the first half of this year was 0.

As for Forever 21, it is now facing fierce competition from several big players and thousands of small players. It has not yet done enough to persuade Chinese consumers in the big environment, nor has it sorted out the relationship and price between different operators.

It is not easy to counter attack.