Chances in international fashion are growing

Chances in international fashion, After losing momentum in 2016 due to geopolitical uncertainties, the global fashion industry will somehow regain its development speed in 2017 with a growth of 2.5-3.5%.

World fashion industry with many new opportunities. Photo: EPA

Chances in international fashion, This positive prediction was made by analysts of consulting firm McKinsey (USA) based on a number of macroeconomic indicators, including forecast that global GDP will grow 3.4% compared to an increase of 3.1% in 2016.

Along with that, investors also expect that the innovative options of fashion monuments like Burberry Group Plc with the “See it, buy now” technique will help bring a new breeze into the industry.

Brands are having an opportunity to prosper in international fashion

The prosperity in the fashion field will be good news for the famous fashion brands that have struggled over the past year such as Abercrombie & Fitch Co. from USA, Hugo Boss AG of Germany and Fast Retailing Co. Japanese.

According to McKinsey’s analysis, these fashion houses need to adapt quickly to changing consumer tastes, especially for the Millennials (they are the first generation grew up in the social media and is currently between the ages of 18 – 35), has a smarter and more unpredictable shopping habit.

A McKinsey report said that of the 1,600 business leaders surveyed, 40% expected market conditions to improve in 2017, compared with just 19% in 2016.

However, the estimate is optimistic, but the fashion industry has not forgotten to point out the challenges they may face in 2017.

The results of the Global Fashion Survey conducted by the consulting firm McKinsey show that the majority of respondents think that the two biggest challenges of the fashion industry in 2017 will continue to be the negative impact of the world instability situation – especially after two “earthquakes” about Brexit and the victory of the United States President Donald Trump, along with threats from various terrorist organizations and fierce competition from online sales area.

An expert in the fashion industry Olivier Abtan has stated that luxury fashion brands will witness an average growth of 2 to 5% this year, compared with an increase of 8 to 10% of the previous decade, in the context of consumer tastes now tends to shift to more luxurious but affordable brands like Michael Kors and Tory Burch.

According to experts, these challenges will put business leaders on the one hand to face many changes in consumption habits and internal activities in the fashion system, but on the other hand are opportunities for them to improve their work performance by focusing on improving customer experience, multichannel retailing (retail All-in-One marketing model) and digitizing value chains.

Luxury fashion brands will witness an average growth of 2-5%. Photo: EPA

More interestingly, the fashion industry will likely focus on systematic growth in 2017, instead of just focusing on cutting operating costs.

According to the results of the Global Fashion Survey, only 5% of business leaders said that spending restrictions would be their top concern in improving profits.

Instead, the form of system growth they are aiming to focus on is developing businesses that bring in a lot of revenue, along with rolling management.

In addition, the key investment areas will focus on unifying the multi-channel retail model, promoting e-commerce and choosing digital marketing plans.

Systematic growth is also expressed through customer relationship management (CRM) systems and improving the experience of buyers in retail chain stores.

One of the most innovative reforms in the past few years is the appearance of a new buying trend: “Buy now see now” (Buy now see now). Famous brands such as Burberry, Prada or Louis Vuitton are enthusiastically promoted.

Chances in international fashion, With this form of shopping, customers can order all items in the collection of fashion brands right from the time the models are still walking on the catwalk, thereby eliminating the nightmare of shoppers when they have to wait until six months before the items are officially on the shelves, while preventing the situation of stealing ideas (copycat) from fast fashion brands (fast fashion) like H&M, Zara , Topshop, Forever 21 …

With the innovations of fashion brands, this year, experts predict that China, with its fast-growing middle class, the rise of mobile shopping and demand. Flourishing consumption, will be one of the surprising factors for the fashion industry in the world.

The world’s second largest economy is expected to contribute about 28% to the total number of high-income people globally during 2015-2025, compared to only 3% of the United States.

In addition, along with positive estimates of the economic status, Chinese consumers’ consumption of fashion items will also increase, especially among global fashion brands, amidst the form of electronic shopping is increasingly prevalent.

Not to mention the online shopping channels like Alibaba and Shangpin are also contributing to bring fashion closer to the people of this country.

Along with the development of the middle class, the urbanization process is also expected to “make things” this year.

The rapidly growing cities have created a rich source of consumption for the fashion industry

Over the past 30 years, as many as 400 million Chinese have moved from rural areas to cities.

While in India and a number of other developing populous countries, traditional mid-sized cities are now becoming crowded, opening up opportunities for new urban areas and bringing additional consumption channels for the fashion industry.

However, continuous development means that apart from focusing on local customers and in urban areas, fashion businesses operating in developing markets are likely to face increased competition from local rivals.

For example, in the Indian market, the largest local corporations and retail businesses are encroaching on the fashion segment with a competitive strategy based not only on price but also on diversity and speed of launching products to market.

These corporations and businesses are threatening to take away the market share of many familiar names such as H&M, Zara, Uniqlo and Mango.

According to studies, in 2017, the same situation will occur in Africa, the Middle East, China, South Korea and other important markets.

Chances in international fashion, Along with the improved standard of living, in 2017, consumer demand is expected to become more advanced, dependent on technology and harder to predict than ever before as customers are more receptive at this time and they have access to better information, they have more channels to share information, higher demand and more aware of the value and authenticity of the product.

Moreover, with the diversity of goods and products, buyers also tend to “blend” different brands and designers, and participate in wider shopping in the past.

Therefore, it is expected that the market this year will become much more complicated for the long-standing names based on the purchasing habits of loyal customers.

Phương Nga (Summary)