Why China led the ‘Great Retail Apocalypse of 2017’ and how fashion labels are reinventing themselves
This year has seen a halt in the growth of bricks-and-mortar fashion stores in China, leading to major strategy changes among the industry’s leaders. We look at how integrating online and offline services helps retailers grab market share
The “Great Retail Apocalypse of 2017” is a term that sends anxiety levels soaring across the international fashion industry. And while it may sound theatrical, this phrase has been coined to reflect a very real problem – and one that originated in China.
This is the first year in history that has seen more luxury store closures than openings around the world, bringing a sudden halt to the relentless expansion of European and American brands.
It was China that caused the initial flurry of bricks-and-mortar builds, and a decade down the line, it was also China that precipitated the current crisis.
When European retailers first opened their eyes to the business potential in China in the 2000s, a plethora of glitzy boutiques catering to newly minted millionaires started springing up around the country.
Luxury brands have missed opportunities to optimise their omni-channel capabilities
This quickly turned into a feeding frenzy, with the pace of openings becoming somewhat frantic over the last decade – by 2014, 10 of the world’s top luxury brands had built 1,320 stores in China in just four years. The thinking was, a glossy luxury boutique in every first and second tier city in China would make up for stagnating growth in the West.