Zara, the main brand of Inditex, one of the world’s largest fashion retailers, is trying to expand globally according to The Economist.
What’s the secret of Zara’s success? The company market strategy is based on sourcing just over half of its products from Spain, Portugal and Morocco. This strategy means spending more money in the production phase but at the same time cutting the supply chain costs. In this way, Zara can see what customers are actually buying, produce it and then sell it straightaway, avoiding unwanted stock.
For now, Inditex’s market is mainly Europe, where it sold 70 percent of its products in 2011. However, Europe is suffering from stagnation, and Inditex needs new markets. Therefore, the chairman, Pablo Isla, is planning to invest in China.
Iria Campos, a Zara designer, says Chinese women tend to buy pastels, instead of the stronger colours Europeans prefer, because they flatter their pale skin. Generally speaking, however, European and Chinese’s tastes are surprisingly close. Nonetheless, Zara’s prices are higher than those of its Chinese competitors. So, if they want to expand into the Chinese market, they will need to successfully market the quality level of their clothing.