Fast-fashion brands face backlash for poor quality(2)

An unclear future

Over the past two to three years, while the whole clothing industry felt the chill of the economic downturn, fast-fashion retailers were painting a rosy picture as the Chinese market contributed to their sales growth.

According to H&M's financial statement for fiscal year 2013, the company raked in 6.5 bln yuan (over $1 bln) from the Chinese market, up by 23%, a 4.4% share of its global sales. In the meantime, it made its biggest expansion in China, opening 74 new stores. In fiscal year 2014, it plans to open 375 more stores globally, mainly in the US and China.

Japanese fashion retailer Uniqlo also saw its sales take off in China, soaring to 7.57 bln yuan (over $1.2 bln).

According to CB Richard Ellis, a consulting company based in Los Angeles, Uniqlo, Zara, H&M and C&A had 523 stores in China by June 2013. New stores opened in China after 2012 amounted to 207, 40% of the total new stores. China is undoubtedly the top overseas market for these global retailers in terms of store number.

However, fierce competition and slow expansion in second- and third-tier cities have been a drag on sales. A performance report by Inditex Group, which owns the Zara chain, shows that the growth of Zara slowed in 2013. As a result, it launched a large-scale clearance sale last June, a rare occurrence.

The same thing happened to H&M. Last November's Isabel Marant for H&M, a collaboration with the renowned French designer, got a cold reception in Beijing, a huge contrast to just a few years ago, when Chinese fans waited in line overnight for new collections.

Spanish retailer Mango, which entered the Chinese market 10 years ago, is facing a more serious situation, constantly shutting down stores in Shanghai and Nanjing.

With quality issues a likely cause for their problems, Xiong has urged these retailers to stop the rot and improve their quality management.

"If they keep ignoring the problem, they'll probably face a downward slope," Xiong said.

By Qian Ruisha