Urban Outfitters Exits Chinese Market
Urban Outfitters is shuttering its flagship store on the Tmall website on September 12, 2021, a move that will mark the brand’s exit from China as the company will no longer have a physical presence in the country and will not sell through any other eCommerce platforms.
According to an update posted on the company’s Weibo account, the move to exit China is part of its effort to adjust its global strategy and it is only temporary. The lifestyle retail brand has about 1.14 million followers on the Tmall website.
Urban Outfitters is far from being the only brand that has chosen to exit China even though the country has a lucrative $200 billion apparel industry. With growing competition from local businesses and the rise of cheaper, online-only sellers on marketplaces such as Taobao and Tmall, running a profitable business has become more challenging for Western brands. These brands are also struggling to keep pace with the pace of products of other Chinese fast fashion brands, Business of Fashion reported.
Additionally, the Xinjiang cotton controversy has led to a boycott of Western brands, making doing business in the country harder. For one, Swedish retailer H&M saw sales decline by nearly a third in the second quarter largely because of consumer backlash in the country.
Some of the other major brands that have exited China include ASOS, New Look, Topshop and Old Navy, as well as Inditex brands such as Bershka, Pull & Bear and Stradivarius. Others such as Mango are choosing not to open any more physical stores.
This is not to say that these brands are turning their back on doing business in the country. Earlier this month, Forever 21 announced that it was reentering the Chinese market for a third time by licensing its operations to Lasonic Limited. The company is reportedly also changing its strategy to include flash sales and offering access to its products on group buying platforms such as Vipshop and Pinduoduo.
Originally published at https://retailbum.com on August 25, 2021.
