Affordable fast-fashion retailers are expanding their product offerings by incorporating higher-priced third-party brands, diversifying their product mix.
H&M’s CEO announced plans to expand third-party brands online and in stores, while Zara has partnered with Clarks and Ader Error for exclusive items.
Fast-fashion companies are adopting the marketplace model to compete with e-commerce giants, aiming to sell diverse brands and higher-margin products. This strategy attracts new customers and enhances their brand reputation. Partnering with fast-fashion brands offers third-party brands greater exposure to a wider audience.
Fast-fashion brands face tough competition from e-commerce giant Amazon, with projected apparel and accessories sales of US $ 69.72 billion in 2023, comprising 32.6 per cent of total US retail e-commerce in the category. Without a strong response, Amazon’s market share is expected to grow.
To achieve its sales doubling target by 2030, H&M has recognised the importance of incorporating third-party brands on its website. H&M currently offers 70 external brands across six markets, including popular names like Adidas and New Balance.
During the corresponding period, H&M experienced a 6 per cent increase in net sales, approximately US $ 5.36 billion. Conversely, Zara observed a 13 per cent growth in both in-store and online sales in its recent quarter, reaching € 7.6 billion (over US $ 8 billion).
