Counter-attacking the aggressive expansion plans of Swedish fashion rival H&M in India, Spanish fast-fashion brand Zara has decided to slash the entry-level prices of its products by more than 50 per cent from current Rs. 799 to Rs. 390.
Product availability in this price range has now made Zara clothes accessible to an even wider range of shoppers at different locations.
The move is majorly aimed to woo the price-conscious Indian consumers and help brand itself beat its arch-rivals in the fashion retail business. Markedly, Zara reported a 40 per cent decline in its net profit to Rs. 48 crores despite a 21.4 per cent increase in sales to Rs. 1,023 crores in fiscal 2017.
Arrival of H&M in India in 2015 made the market situation tougher for Zara. H&M, in the meanwhile, reported a twofold increase in its India sales to Rs. 954 crores in the year ended November 2017 as compared to Rs. 490 crores in the same period of 2016.
Zara currently operates more than 21 stores in India while H&M is preparing to take its store count to 30 in India by the end of this year. The fashion retailer is also gearing up to kick off its digital store in India.
Notably, Zara has already launched its online operations in India in October last year. Inditex, the parent company of Zara, has fixed Rs. 290 as a delivery charge for standard deliveries while no delivery fee is levied on shopping over Rs. 4,000.
Not only Zara, GAP, Levi Strauss, Benetton and M&S that have been present in India for quite some time now are also facing the heat of the expansion plans of H&M which is gaining popularity in the Indian market and has plans in place to further increase its store count to around 50 with an investment of Rs. 700 crores in the next two years. Zara is, however, yet to create a retail expansion layout to match the presence of H&M in India, as nothing in this regard has been reported yet.
