Fast Fashion Industry
With an increased advancement in internet penetration and mobile usage, Asia will continue leading the globe’s e-commerce market (Chen, 2017). Kind of (2019) states that some of the largest e-commerce platforms in the Asian context include JD WorldWide, Kaola, Lazada, Shopee, Tmall, and Taobao.
The e-commerce niche usually represents the small chain into which e-commerce platforms fall (Chang et al., 2019). The research study by Chang et al. (2019) explains that the Chinese market is full of fierce competition from internet-based platforms. Therefore, the e-commerce niche has been segregated into two large e-commerce platforms; Alibaba and Tencent, making it difficult for changes in the e-commerce platform niche (Chang et al., 2019). With the introduction of the Pinduoduo platform, strategically positioning itself within e-commerce platforms’ constraints, the e-commerce platform niche has expanded a notch higher. Therefore, to understand the dynamics in the e-commerce platform niche, risk theory should understand customer resistance to e-commerce platform change (Chang et al., 2019).
Alzahrani (2019) explains business strategy according to Andrews (1971), who defines business strategy as a company decision patterns that aims at determining and revealing objectives, goals, and purposes of producing policy principles and plans of achieving the economic and human intents. Porter (1998) segregates business strategy into three generic processes; focus cost leadership and differentiation strategies. With the introduction of the digital economy that shifts the public sector and business management, the market place has significantly experienced dynamic changes to the enhancement of e-commerce (Alzahrani, 2019). Torres et al. (2014) explain that business strategy is all about value creation and plan designation, subject to future business competitiveness. Therefore, to understand the business strategy approach to e-commerce platform growth, resource-based view theory needs to be considered (Alzahrani, 2019).
The current coronavirus pandemic has also played a significant role in the development of e-commerce. Kwak, Zhang, and Yu (2019) reveal that e-commerce retailers in the Asian context have seen the rapid growth of sales during the coronavirus crisis since consumers are under lockdown and are left with online platforms. As brick-and-mortar retail outlets are shut out of the market, the Asian government lockdown has enhanced in-expected boost for niche e-commerce platforms that consumers may not have discovered. According to the digital advertising solutions provider Criteo, market research indicates that more than 50% of consumers currently have more plans to shop online due to the pandemic compared to 17% of consumers who reported that they would make few online purchases (Kwak et al., 2019). For example, the Shopee e-commerce platform had an increase in its gross merchandise, rising to 74.3% to reach 6.2 billion in the first quarter. The Chinese Financial Hub’s Commerce Commission reported that e-commerce platforms took a shopping festival launched in Shanghai. The event earned US$2.2 billion in the first 24 hours, therefore indicating the vast growth in e-commerce. Asian e-commerce is also penetrating the fashion industry since many Asian consumers love luxurious goods. (Kathuria et al., 2019) indicates that the Asian e-commerce in the fashion industry is thriving as many consumers venture into fashion.
2.3. Fast Fashion Brands in China
2.3.1. Fast Fashion Brands
Fast fashion refers to the apparel that is swiftly transported from fashion stores, retailing the current fashion brands. Since the beginning, the apparel industry has always been a low-capital and labor demanding industry. Taplin (2014) states that the industry has been branded by low entry restrictions and consistent production for a large market. As the apparel market continued developing, it shifted a lot of exposition to developing countries where labor was cheap. The clothing industry has one of the largest chains of production and consumption. According to Linden (2016), the then estimates indicate that one in six people is employed in a global fashion industry section, making it the most labor dependent industry. Fast fashion emerged due to clothing organizations relocating production overseas, which permitted the cost of clothing to drop drastically (Bhardwaj and Fairhust, 2010). Previously, one could not acquire high fashion content at a high price; however, fashion brands are currently continually evolving, and fast-fashion retailers such as Zara, Forever 21, Gap, TopShop, and H&M can exploit on these trend via their supply chains. Cohen 2012, describes the fast fashion model as a “streamlined system involving rapid design, production, distribution, and marketing (Cohen 2012, p.172).” Fast fashion brands can deliver small quantities of greater product variety through the production chain, allowing consumers to get more fashion content and product diversity at a low price.
2.3.2. China’s Fast Fashion Brands
The sales in China’s clothing market have increased over CNY 2,077 billion in 2018, rising 7.8% year-on-year, marking the highest growth since 2014 (Wang and Li, 2018). China’s apparel market is the largest in the globe surpassing the United States. The fast-fashion brands in China have a significant growth with brands such as Zara, Uniqlo, and H&M. According to Wang and Li (2018), Uniqlo was among the first fast brands in China to open, with its first shop opened in Shanghai in 2002. China’s fast fashion industry continues to flourish in the global market, with young Chinese people venturing into the apparel market (Su, Sun, and Tong, 2016). Currently, the clothing specialist retailers have also started offering a broader range of products surpassing fashion, to take advantage of the current large customer base. Fast brands such as Zara offer jewelry, bags, and footwear. In contrast, others like Forever 21 have expanded into personal and beauty care to provide their customers with a seamless experience where they can fit a whole outfit with bags, shoes, and jewelry in a single store. According to Wang and Li (2018), some fast fashion brands in China have also ventured into kid wear, such as Uniqlo, touching into China’s embryonic child apparel market.
Within the past few years, some of China’s domestic brands have swiftly developed in the market with numerous strategy changes, increasingly affecting the international fast-fashion brands. The domestic fast fashion brands are focusing on brand image, customer experience, product design, marketing strategies, and price range to meet the needs of Chinese consumers (Su et al., 2016). For example, my style is a Chinese domestic fast fashion brand with over 1000 meter squared of space. The brand has amalgamated all particulars for customer services, store arrangements, and creativity to cater to the consumer, refining the overall customer experience. Westlink is another brand that incorporated a leisure area to give the customer a relaxing place for a comfortable atmosphere that would allow consumers to acquire more knowledge on the brands and products (Zhenxiang and Lijie, 2011). The brand’s display and clothing style are like that of Zara, Urban Revivo, making it to be confused as the new cloth line from Inditex (Su et al., 2016). According to the Chinese clothing network report, Hotwind (2017), MJStyle had expanded 160 and 101 new locations in 2016, exceeding some huge brands. By 2017 the brand had surpassed H&M, Zara, & Uniqlo with 200 more unique locations.
Moreover, Chinese brands under the company HLA Corp are also among the success stories of China’s fast fashion industries. In 2018, HLA Corp had 6,673 stores with 5,097 HLA brands, 1,281 EICHITOO brands, and 295 other brands. HLA Jean brand’s estimate is above the 90’s generation incorporating a variety of styles ranging from casual to business clothing. According to Zhou Jianping, the HLA founder, the brand is likely to become the next Uniqlo due to its aggressive business model. As domestic brands continue to develop and compete, global fast fashion brands are also continuing with strong growth, changing China’s landscape, commercial real estate (Liu and Zhang, 2019). The fast-fashion brands succeeding in China are those who localize their sales strategies, sizing, and fashion to fit the Chinese consumers. When the connection between consumers and brands is strong, brands tend to continue developing.
2.3.3. Impacts of COVID-19 on Fast Fashion Industry
COVID 19 could trigger the words most significant most considerable economic retrenchment since World War II hence affecting all industries, including fashion industries. This is because there is considerable uncertainty about how epidemiological and financial situations will evolve since considering the pandemic’s length and gravity seems like a horrendous task. Fashion industries in china are more globalized, meaning most of them are highly exposed to supply chain interferences due to COVID 19. The fashion industry in China faces significant risks due to its non-essential nature. This is because consumers globally are no longer in need of new products due to lockdowns.
2.3.4. Emerging concerns related to COVID 19 from the perspective in China
The recent outbreak of the COVID 19 pandemic has resulted in production collapsing, followed by the closure of shops worldwide. Additionally, due to its collapse, the two most famous retailers such as Europe and America are canceling their orders hence canceled orders are a source of concern to China fast fashion industries (Almila, 2020)
2.3.5. Supply chain disruptions in china due to COVID 19
The COVID 19 pandemic has hit businesses worldwide on an unprecedented scale and speed, especially in China. It has caused companies to collapse and close, the slowdown of factory outputs, and the interference to the worldwide manufacturing industry and other stock networks. Significant initiatives include fashion and clothing industries, and they have been significantly affected because they are the major world production center over the past two to three decades (Almila, 2020). China is the most critical wholesale production of raw materials as well as significant subsystems to manufactures internationally. Both global manufacturers and China’s original equipment manufacturers face problems of going back to their standard production capability; hence, both parties much feel the impact of short correspondences in their supply systems (McMaster et al., 2020). However, companies inside china are slowly resuming to their standard productions because of some reasons. These reasons include unavailability of parts from lower-tier suppliers, scarcity of workers who may still be stuck in their rural homes due to lockdowns, stringent requirements for companies to establish enough defensive procedures, and provide an adequate supply of protective clothing for employees.
2.3.6. Chain disruptions using the reduced production perspective
The evolution of the local epidemiologic situation in source countries like china has impacted workforce availability and production and multimodal logistics. This is because the production of fast fashion goods could be moved away to other source countries that are getting back on their feet faster like Asia or closer to retailers to diversify their supply chain risk (McMaster et al., 2020).
2.3.7. How Chinese Companies are fighting back COVID19 pandemic
Many companies are trying to develop alternative solutions, which include shifting orders from primary suppliers to tertiary or secondary suppliers to make up for the missed delivery. Also, some OEMs have tried to diversify their expected production to make different products. For example, some fashion industries are now venturing to produce face masks, which helps alleviate the spread of COVID19, which has engendered more revenue and positive feedback to these fashion industries (Almila, 2020). They have also improved their inventiveness to meet their production needs and employ more labor force.