China is complex. Stores open and close, brands disappear. In August, a hashtag about Metersbonwe (and its many branches, subsidiaries and affiliates) burst into a hot search list on Weibo. The company has been in the spotlight due to a loss of more than 2.1 billion yuan in three years and almost 90 percent of the market value.
In fact, these last few years and months have been a rollercoaster ride for foreign names in the affordable fashion and fast fashion industries. On July 31st, Bershka, Pull&Bear and Stradivarius (three sub-brands of Zara) announced the closure of their Tmall flagship stores. Three brands that closed their offline stores in China last year have officially exited the Chinese market. These are not isolated cases; In August, American clothing giant Gap pulled out of shopping malls in China significantly, and Forever 21 re-entered the Chinese market for the fourth time after three launches.
Even domestic clothing manufacturers are planning to expand overseas due to local competition. According to media reports last month, China’s leading women’s clothing lines are entering the cross-border e-commerce platform AliExpress to gain a foothold in the overseas market. One of these is Urban Revivo. — often known as the Chinese version of Zara.
Founded in 2006, the Guangzhou-based brand even surpassed Uniqlo to win first place in Tmall 618 Shopping Festival women’s clothing sales, and opened stores in overseas markets back in 2016. Here, Ching Daily analyzes the future potential of the company abroad.
Foreign strategies of Chinese Zara
Domestic clothing brands mainly use four approaches to explore the global market. First, they can use third-party cross-border e-commerce platforms led by Amazon; secondly, they can open offline stores in foreign markets; third, they may acquire foreign brands to go out indirectly; or fourth, they may adopt the preferred DTC treatment of their contemporaries, including the creation of e-commerce websites.
Urban Revivo opened its first global physical store in Singapore in 2016. In 2018, she opened a store in London and became the first Chinese brand to settle in the Westfield shopping complex. To date, she has also opened offline stores in Thailand and the Philippines. When asked about the brand’s performance in these markets, a spokesperson for the company said: “Given the universal impact COVID has had on brands, our results in these markets are exceptional” (but actual numbers have been omitted).
As the company points out, its main battlefield for future development is the United States, as can be seen from the target group on its official website. Based on data released by Similarweb, a traffic analysis website, the US is the first country or region in terms of official website traffic in July, accounting for 70.34% of the total, confirming the importance of the US market. However, given the current Sino-American situation and the political climate, companies like Urban Revivo will have to work hard to convince American consumers to buy Chinese-designed products.
Even offline online battlefield
Growth in e-commerce retail sales has accelerated since 2020, driven by increased penetration of online shopping. Ching Daily reported that Shein and Zaful are the top cross-border e-commerce merchants in the DTC market. With a deep understanding of the needs of today’s young consumers, they quickly became popular in overseas markets with an ultra-fast fashion model that ushered in a new era for Chinese companies to go global, such as Urban Revivo.
“Our official DTC website was established in early 2021,” the spokesperson continued. “As the pandemic has evolved, more consumers have been shopping online. When offline stores were closed, our customers still wanted access to our products, and at the same time, we were able to use this opportunity to reach the global consumer base.”
This model worked. Open YouTube and search “Urban Revivo” to find some promo videos of KOL trying on their clothes. Anna Zapaly’s video (878,000 subscribers), released a year ago, has been viewed 100,000 times. If a brand wants to roll out DTC overseas, they need to think hard about driving traffic. According to Similarweb, YouTube accounts for 52% of all social media traffic on the official site, so building partnerships with YouTube content creators is key.
The brand confirmed, “Our main social platforms are Instagram and Youtube, while TikTok and Pinterest are secondary. Since consumers are spread across multiple platforms, it’s helpful to focus on a few and do them really well. It helps create a more powerful presence.” This resulted in 250,000 followers on official Instagram accounts and 280,000 followers on TikTok.
In 2015, Urban Revivo proposed to position itself as a “fast luxury” supplier in the domestic market, balancing the speed of production and product quality, and thereby distinguish itself from other fast fashion names. It worked, as in 2020 the company recorded a revenue scale in excess of 5 billion yuan. This positioning has been continued, providing global exposure.
“As a global brand, our position in fashionable affordable luxury is the same globally, but our customer base in China is slightly different. Our Chinese consumers are younger, which makes sense given their love of trendy premium and luxury fashion styles, as well as their general purchasing power. The wide age range of clients is a perfect fit for us as our brand positioning continues to revolve around a fashion-focused lifestyle that allows everyone to express themselves through style, and this is also true of us all over the world.”
Benefits of an embedded supply chain
As a domestic clothing brand, one of the benefits of Urban Revivo going overseas is the local supply chain. In 2017, the company sold all of its own plants to shift its focus to third-party partners, according to CBNData. She then took the lead in product planning, production, logistics and sales, adopting the SPA model in order to realize product delivery on a large scale and efficiently.
“Our progress to date is largely due to the mindset of today’s young (and young at heart) consumers. Today’s shoppers are more diverse, multicultural and global-minded than ever before, and fashion is a vital aspect of their self-expression and identity. Brands now require a more diverse selection of styles to meet today’s needs,” the company said.
Thus, with the support of a “fast” supply chain, it can always keep up with the ever-changing fashion trends, offer cutting-edge designs to consumers in a timely manner, and respond to their needs in real time.
But not everything is so simple
Despite strong and steady expansion, brands from China will always have trouble convincing global consumers. Carl McKeever, retail analyst and head of retail agency Visual Thinking, said: “When Urban Revivo expanded its store in London, it needed to think about how to stand out from other brands in the saturated local fashion market. A proven positioning and model in China may not be applicable to complex and ever-changing overseas markets. Adapting measures to local conditions could be the first step for Chinese brands to go overseas.”
In addition, as sustainability demands grow among international consumers, the company could be more transparent in its commitment to sustainability if it wants to be seen as a contender for the overseas middle-class market. Urban Revivo believes that its fashion is not and should not be defined by the wasteful, unsustainable, cheap or low quality throwaways seen on social media. “These are not the types of products that we believe in making and this is not the brand standard we strive for and adhere to.” Let’s see if this strategy can pull it off.