Can H&M Change Pet Clothing Brand And Retain Fast Fashion Consumers?

Recently, reporters learned that in November this year

H&M related staff told reporters that

The next designer collaboration series will have more products.

In fact, in recent years, the fast fashion brands represented by Zara, H&M and so on have suffered from "cold winter", and their performance has slowed down or even declined.

In order to boost their performance, different brands have adopted different strategies for self-help, and this H&M is also concerned about pet clothing.

Data show that our country

Facing the rapid development period, the pet economy continues to heat up, and the scale of China's pet consumption market has reached 170 billion 800 million in 2018.

However, with the rapid development of our country

There are also problems such as low brand awareness, low industry and low concentration of industries.

Whether H&M can take advantage of the pet industry to boost its performance remains to be tested.

The temptation of pet clothing market

Recently, the blue whale producer learned that Moschino announced in Instagram that its partnership with H&M will be launched in November 8th, including pet clothing.

It is understood that this will be the first time two brands released pet clothing.

In recent years, with the rise of the pet market, pet clothing has also become a new nugget.

The blue whale producer learned about the public information. In the previous Pet Fashion Show, Touchdog, AliceD, Cheepet, Dogismile and other brands started hundreds of high-end new products in Tmall. In addition to the more common lattice four leg clothing, there were flannel pajamas, gowns, woolen sweaters, lovely ladies skirts, as well as Moose ball skirts, Christmas elemental elk clothing, Navy wind skirts and POLO shirts for specific occasions.

Cheng Weixiong, an independent analyst in shoe and garment industry and general manager of Shanghai Liang Qi brand, told a blue whale producer that at present, there are more pets in the Chinese market, especially in a second tier city, and the pet industry is booming. Pet clothing will become an important supplement.

"At present, there is no big brand of pet clothing in China, and this segment market has broad prospects."

H&M related staff to blue whale producer revealed that in pet costumes, the next designer collaboration series will have some products.

However, pet clothing will only become a new product extension, and it is unlikely to open shop alone.

At present, H&M will still wear children's clothing.

Men's wear and women's wear are the main products. There are H&M Home home products series on line.

Behind the category extension is the decline in H&M performance and the whole performance.

Atrophy.

According to the 2018 first half financial reports issued by H&M, from December 2017 to May 2018, the group's tax sales volume was 114 billion 17 million kronor (about 12 billion 700 million US dollars), which was flat compared with the same period last year. In the first half of this year, its operating profit was 7 billion 215 million kronor (about 800 million US dollars), down 33% compared to the same period last year, and the operating profit margin was 7.3%, down 3.7 percentage points compared with the same period last year.

It is worth noting that during the reporting period, the total number of H&M group stores increased by 62. Therefore, H&M is not increasing its income.

And the stagnation of sales growth has further expanded H&M's inventory.

Data show that during the reporting period, H&M stock reached 36 billion 333 million Swedish kronor (about 4 billion US dollars), an increase of 13% over the same period last year, accounting for 31.9% of H&M sales.

Besides H&M, other fast fashion brands are also having a hard time.

Recently, the first half year performance data released by Zara parent Inditex group (ITX.BME) showed that the performance of Zara has slowed down sharply. In the 6 months ended July 31st, group sales increased by 3% to 12 billion 30 million euros, gross profit margin was 56.7%, net profit increased 3% to 1 billion 410 million euros.

In the same period last year, Inditex group's overall sales rose 11.5% to 11 billion 670 million euros, gross profit increased 11% to 6 billion 600 million euros, and net profit increased 9% to 1 billion 370 million euros.

Meanwhile, Gap group's second quarter 2018 figures show that group sales grew by 8% to $4 billion 100 million, and gross margins rose 10% to $1 billion 630 million.

However, the sales of its main brand Gap declined by 5% after 1% last year, which has become the biggest burden of group performance.

In this regard, garment industry analyst Ma Gang told blue whale producer, as a whole, fast fashion industry is not an emerging market, and a mature market will not always maintain rapid growth. After a certain degree of growth, growth will slow down or even decline.

From the present point of view, most of the fast fashion industry has poor performance, and in the case of more brands, enterprises must exclude other competitors if they want to achieve growth.

Next, the fast fashion market will enter a tug of war, and some uncompetitive brands will make room for market.

"Under such circumstances, there are two ways for an enterprise to achieve growth.

One is epitaxial growth, that is, to expand sales through opening stores. In addition, it is through internal optimization of category structure, price increase and other ways to find a suitable brand strategy mode.

The extension of the product is also a form of enterprise to seek performance growth, "Ma Gang told the blue whale to produce a journalist.

In fact, facing the dilemma of performance decline, each brand has begun to seek a new way to seek self rescue. The new territory of the pet market may be an attempt by H&M.

In recent years, there are more and more pets in China, and the pet economy continues to heat up.

Data show that in 2018, the scale of China's pet consumer market reached 170 billion 800 million, of which the market size of pet dogs was 105 billion 600 million yuan, and the market size of pet cats was 65 billion 200 million yuan.

With the complete life cycle of a pet, a complete industrial chain has been formed in the pet industry, including a series of products and services such as breeding, training, food, medical, beauty, health care, insurance and so on.

Zhu Dan Peng, a Chinese food industry analyst, told the blue whale producer that with the mainstream demographic dividend of the new generation, the Chinese pet market has become an industry of "meat and potatoes".

From the industry side and the industry side, pet industry, including pet products and service industries, has been developing at a high speed. Under the stimulation of consumption upgrading and the middle effect, pet clothing should be an introduction period in the next three to five years.

"In South market, the weather is not stable, pet clothing will have a large market; and in the north, sooner or later, the temperature difference is more than that of the ambassador pets.

Because pet clothing is the profit supplement of enterprises, making product extension and combination is reasonable.

Zhu Danpeng said.

However, whether H&M can get a share in the pet clothing market remains to be tested.

Ma Gang told blue whale producer, although the pet market is growing faster, but in fact, the overall market capacity is not large, and enterprises should do brand segregation when making pet costumes.

For example, H&M can develop another brand to make pet costumes.

At present, the non-standard development of China's pet industry will also become a test for enterprises. From the relatively mature pet food in China, it may provide some reference for the management of pet clothing enterprises.

According to the analysis of the industry, compared with Mari, Nestle, royal and other well-known international pet food manufacturers, at present, China's pet food industry still has problems of low brand awareness, low industry, low flow rate of business and low concentration of industries.

From the field of pet food segmentation, only two A share listed companies in the pet market are Patti shares and China pet stakes, which have been recognized in the industry.

The 2018 semi annual report disclosed by the blue whale producer in August 8th was informed that its operating income in the first half of the year was 647 million yuan, an increase of 38.76% over the previous year, and the net profit attributable to shareholders of listed companies was 26 million 363 thousand and 800 yuan, down 38.63% compared to the same period last year.

It is worth noting that the commercial mode of OEM Original Equipment Manufacturer is considered to be an injury to its development.

The prospectus shows that the company achieved sales income of 785 million yuan in 2016, of which the OEM mode achieved 670 million yuan, accounting for 85.39%, accounting for more than 85% in 2014 and 2015.

Statistics show that the gross profit margin of OEM is significantly lower than that of other sales models.

From 2014 to 2016, the gross profit margin of OEM has been up to 20%. The gross margin of overseas independent brand sales has increased from 25% to 38%, and the gross margin of domestic direct selling and distribution is 35%-40%.

In addition, the high-end positioning of pet clothing is also inconsistent with the characteristics of H&M's popularity and fast fashion.

Cheng Weixiong told the blue whale producer that pet clothing is not the so-called fast fashion, but needs to be more refined.

From the perspective of user needs, young people are more independent and individualized, while the needs of the elderly are different.

So it's mainly about brand positioning. Fashion is on the one hand, and high price performance is another.

Pet clothing is also a high-end consumer. If you want to increase pet clothing, you need to separate shop from the original brand.

Zhu Danpeng also told the blue whale producer that pet clothing is mainly a high-end consumer group, so this is not a fast fashion and popular industry, but a middle and high-end line industry.

Therefore, for the fast fashion brand H&M, how to explore a path suitable for the industry and its own development mode needs the answer from the market.