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An Empirical Study on the Factors Affecting Chinese Consumers' Preference on Fast
Fashion Industry and the Implication on the Fast Fashion Companies' Performance: the
Case of H&M and Other Fast Fashion Companies' Operation in China
BY
NAN Shu
1130600098
Accounting
ZHANG Lin
1130600179
Accounting
A Business Project Submitted to the Division of
Business and Management in Partial Fulfilment of
the Graduation Requirement for the Degree of
Bachelor of Business Administration (Honours)
Beijing Normal University – Hong Kong Baptist University
United International College
April 2015
1
Acknowledgement
We would like to especially thank our dearest supervisor Mr. Ben Wong. We are
sincerely to express our gratitude and thankfulness to Mr. Ben Wong for all the great guidance
and support given throughout the research process. In the last two semesters, Mr. Ben Wong
has contributed his knowledge and valuable time to support our research and the success of
this research has much to do with the contribution of our supervisor Mr. Ben Wong.
We gratefully acknowledge all the participants and respondents who gave this research
great help. Special thanks go to Dr. Peng Xiaoling, the lecturer of SPSS. She gave advice for
conducting data analysis and helped to pointed out some problems, which we solved later.
Special thanks also go to Mr. Gao, the shop assistant of MUJI, Miss. Ma, the shop assistant of
Uniqlo, Miss Liu, shop assistant of H&M and Miss Li, cashier of H&M. They are all come
from the shops in Yale Shopping Mall. We sincerely appreciate all participants’ and
respondents’ cooperation and contribution.
2
Content
An Empirical Study on the Factors Affecting Chinese Consumers' Preference on Fast Fashion
Industry and the Implication on the Fast Fashion Companies' Performance: the Case of H&M
and Other Fast Fashion Companies' Operation in China ........................................................... 0
Abstract ...................................................................................................................................... 4
1. Introduction ......................................................................................................................... 5
1.1 Statement of Problem: Background and Motivation ................................... 5
1.2 What is Gap and Objective.......................................................................... 6
2. Literature Review................................................................................................................ 7
2.1 Corporate Performance (from Company’s Perspective).............................. 7
2.2 Dependent Variable...................................................................................... 8
2.3 Independent Variable ................................................................................... 8
2.3.1 Quick Response................................................................................. 9
2.3.2 Brand ................................................................................................. 9
2.3.3 Affordable Price .............................................................................. 10
2.3.4 Fashionable Design ..........................................................................11
3. Model and Hypothesis....................................................................................................... 12
3.1 Model......................................................................................................... 12
3.2 Hypothesis ................................................................................................. 13
4. Methodology ..................................................................................................................... 13
4.1 Subjects...................................................................................................... 13
4.2 Sampling and Data Collection................................................................... 13
4.3 Measurement.............................................................................................. 14
4.4 Model Analysis Method............................................................................. 15
4.5 Apply the Results Back into Empirical Study ........................................... 16
5. Analysis and Findings ....................................................................................................... 17
5.1 Data Analysis of PartⅠ ............................................................................. 17
5.1.1 Conclusion of Data Collection ........................................................ 17
5.1.2 Results and Analysis of Descriptive Data ....................................... 17
3
5.1.3 Results and Analysis of Regression Model..................................... 18
5.2 Business Analysis of PartⅡ....................................................................... 21
5.2.1 Results and Analysis of Quick response ......................................... 21
5.2.2 Results and Analysis of Brand ........................................................ 23
5.2.3 Results and Analysis of Affordable Price........................................ 25
5.2.4 Results and Analysis of Fashionable Design................................... 27
6. Implication and Recommendation on Fast Fashion Companies’ Performance................. 28
6.1 Quick Response ......................................................................................... 29
6.2 Brand.......................................................................................................... 29
6.3 Affordable Price......................................................................................... 30
6.4 Fashionable Design.................................................................................... 31
7. Conclusion......................................................................................................................... 32
8. Limitation.......................................................................................................................... 33
Reference.................................................................................................................................. 35
Appendices............................................................................................................................... 38
4
Abstract
The market of fast fashion brands in China is growing rapidly, and foreign fast fashion
brands continue to consider China as the main market of expansion; at the same time, Chinese
customers demand higher level of products of fast fashion companies. Thus, this research
used primary research to gather information about customers’ preference of fast fashion
brands and applied the results to the operations. Brand loyalty, affordable price,fashionable
design and quick response are the factors affecting customers’ preference towards those
brands. They provide implications, which becomes the second part of the report and gained by
primary and secondary research, that fast fashion companies in China should adopt expansion
strategy, keep the price affordable within a certain range and response quickly towards
consumers’ demand.
This research in fact focuses more on the second part. The first part is used as a guidance
to obtain fast fashion business operating practices and implications. The approach of the
second part analysis is around the four independent variables.
Key Words: fast fashion, quick response, brand, affordable price, fashionable design,
H&M, consumers’ preference, companies’ performance
5
1. Introduction
1.1 Statement of Problem: Background and Motivation
Fast fashion production is welcomed by consumers because it allows mainstream
consumers to buy the latest fashion trends at affordable prices. Based on the competitive
advantages, fast fashion industry has a rapid growth in many countries. For example, Inditex,
the parent company of ZARA, started its first store in Spain in 1975 and is now operating in
87 markets with over 6000 stores in 2013 (Inditex group annual report, 2013). Fast fashion
industry has developed in western countries for many years, but fast fashion does not have a
long history in China and it is still in developing stage.
With the rapid development of Chinese business, Chinese consumers have more choice
on selecting their favorite products. Fast fashion companies in China are challenged by more
and more new entering fast fashion brand and developing electronic business in clothing
industry. Chinese consumers can choose cheaper and fashionable products on the Internet
with more comfortable way. Therefore, fast fashion companies thirst in expanding their
market shares to improve operational performance, especially in China market.
Thought fast fashion companies have competitive advantages when it comes to China,
Chinese consumers lack the knowledge about fast fashion products and they cannot tell the
difference between fast fashion industry and non-fast fashion industry. Fast fashion is a
business strategy that aims to reduce the processes involved in the buying cycle and lead
times for getting new fashion product into stores, in order to satisfy consumer demand at its
peak (Barnes & Lea-Greenwood, 2006). Fast fashion industry has the characteristics of quick
6
response production capabilities and enhanced product design capabilities to produce the
products that meet the latest trends of consumers’ need (Cachon, & Swinney, 2011). Fast
fashion products are exploited with the minimum lead time during the whole procedure.
Consumers can benefit from fast fashion system with frequently updated and fashionable
products.
1.2 What is Gap and Objective
Fast fashion industry has long history in developed countries. Companies like ZARA,
Hennes & Mauritz (H&M), which come from Europe, and the Gap Inc., which comes from
the US, have gained growing popularity in the world. As one of the major economy markets
in the world, China is also an important market for fast fashion industry. With competition in
more mature American and European markets stiffening and economies in recession, fast
fashion is looking forward to expand in new growth markets around the world.
Fast fashion brands quickly welcomed by Chinese customers in the past decade. At the
same time, Chinese customers become more demanding and show higher expectations on fast
fashion products. However, fast fashion’ strategies in China cause some problems. There is an
intensive demand of Chinese customers for fast fashion products; in the meanwhile, fast
fashion companies encounter some bottleneck problems in meeting Chinese market. Hence a
gap arises here. It is necessary for fast fashion companies to overcome problems in China’s
market since China’s market takes a large market share in the world. Besides, fast fashion
receives a little academic attention (Barnes & Lea-Greenwood, 2006). Many literature
reviews consider neither the linkage between customers’ preference and companies’
7
performance nor the linkage between Chinese markets and fast fashion industry, which would
lead to some implications on Chinese fast fashion brands. Both of the linkages are important.
The objective of the report is to reduce the gap between Chinese customers and flagship
fast fashion brands, giving more advices to companies on meeting consumers’ preference and
improving operating performance in China. In order to fill up this gap, this paper aims at
providing a thorough analysis of fast fashion industry and implications on operations in
Chinese market by providing models which links customers’ preference and fast fashion
companies’ performance. For concrete and practice, cases of H&M and other famous global
fast fashion companies which also most welcomed by China are provided.
Through two part of the report, we try to achieve the relationship between the factors
influencing consumers’ preference and fast fashion companies’ performance from consumers’
perspective and companies’ perspective. Deeper research is conducted by analyzing the
relationship, which is gained by doing primary and secondary research.
2. Literature Review
2.1 Corporate Performance (from Company’s Perspective)
According to SG. Hayes and Nicola Jones (2006), fast fashion companies’ performance
could be measured by sales, retained profits, or some other ratios. Those results were showed
on companies’ financial reports or annual reports, which directly reflected corporates’
financial performance. In addition, according to Kozinets, Sherry, DeBerry-Spence, Duhachek,
Nuttavuthisit & Storm (2002), market shares could be increased by expansion and customers
were encouraged to interact with brand to increase market shares. Corporates’ performance
8
could be evaluated by market shares taken by each corporate. The flagship brand stores with
better corporate performance always take a large part of market shares.
2.2 Dependent Variable
Corporate Performance (from Consumers’ Perspective)
Thamaraiselvan and Raja (2008) reported that brand extension of fast moving consumer
goods was evaluated by consumers, and consumers’ evaluation would have influence on it.
Then Choi, Liu, Mark, and To (2010) raised that brand extension was a product line extension
marketed under the same general brand and consumers’ attitude incurred effects towards
brand extension. This research studies the corporate performance as the brand extension
influencing by consumers’ attitude. The corporate performance from consumers’ perspective
is measured by consumers’ preference, which is how well consumers evaluate fast fashion
companies’ performance. It reflects on how much purchase experience consumers have and
how often they purchase on fast fashion stores.
2.3 Independent Variable
The consumers’ preference on this research referred to those Chinese customers who
prefer buying fast fashion products. This research aimed at analyzing the factors affecting
customers’ preference on fast fashion products. The independent variables were determined
based on the theory and model of Caro and Martınez-de-Albéniz (2014), who defined the fast
fashion business model as the combination of (i) fashionable clothes mostly for consumers
under 40; (ii) affordable prices in the mid-to-low range; (iii) quick response; and (iv) frequent
assortment changes. Considering the practice in China market, brand is more important factor
9
than frequent assortment changes affecting Chinese customers’ preference towards fast
fashion. Therefore it is included in the independent variables.
2.3.1 Quick Response
According to Caro and Martınez-de-Albéniz (2014), the definition of quick response is
postponing risky production decisions, which allows companies to reduce finished goods
excess inventory. Fast fashion business model consists of trendy products mainly for
customers under 40, affordable prices, quick response, and frequent assortment changes. The
warehouse theory supports that quick response is included in fast fashion business model.
Efficient storage, re-working, pick and pack in warehousing enables company quickly
response to customers’ requirement, which is significant in companies’ supply chain.
Quick response must be part of a fast fashion system, because short production and
distribution lead times enables customers to actively buy trendy products (Cachon & Swinney,
2011). It means that companies reduce the time to react to market demand, and customers will
be easier to be pleased with the quickly updated trendy products. Ghemawat and Nueno (2003)
also emphasized that quick response capabilities underlies this business performance. H&M
and Zara have used quick-response production to reach stores as soon as possible, thereby
allowing them to respond to nascent demand trends first, so as to provide and capture more
value from the consumers (Caro and Martınez-de-Albéniz,2014).
2.3.2 Brand
According to Cheng and Chi (2009), brand loyalty generally indicates that customers
repeatedly purchase a good or service over time and customers hold favorable attitudes
10
towards a good or service, or towards the company supplying the good or service. The brand
loyalty of Chinese customers to fast fashion is considered a little, but it is a necessary factor
of Chinese customers' preference. Today’s fast fashion leaders – like H&M and Zara, have
gained a significant marker shares in China. Ke (2010) also alleged that because they are the
first brands moving to China, including Uniqlo and C&A, fast fashion brands captured a
sizeable share of the market early on. These brand images brought a huge number of fans in
Mainland China to fast fashion companies. According to Choi et al. (2010), brand concept
consistency, which was included in brand loyalty, was the most important area in affecting the
consumers’ attitudes towards Zara.
From companies’ perspective, however, brand loyalty of customers is a kind of value,
equity or asset. Hence brand value significantly affects companies’ financial performance.
MIZIK (2014) found that advertising spending or cash flows attributable to brands were used
as an indication of brand equity by many companies. The stock returns should be applied to
evaluate the brand equity since assets related to brands actually have long-term financial
impact (Barth, Clement, Fosthr & Kasznik, 1998). According to Kozinets, Sherry,
DeBerry-Spence, Duhachek, Nuttavuthisit & Storm (2002), a store or shop encourages
customers to interact with the brand by showing fancy collections or other displays.
Increasing the number of such stores can achieve the aim of improve brand values.
2.3.3 Affordable Price
The research is based on the fast fashion market in China. It is necessary to firstly
include one of the important factors on the marketing “4P” theory—Price (others are product,
promotion and place). Affordable price of fast fashion products attract more customers
11
compared with non-fast fashion products (Choi, 2013). According to Caro and
Martınez-de-Albéniz (2014), fast fashion companies always sell products at affordable price,
considering customers’ preference on cheap fashion. Affordable price is an important element
in defining fast fashion. Affordable price is the price that are not over-priced and welcomed
by consumers. Consumers prefers affordable price when they are picking fast fashion
products.
2.3.4 Fashionable Design
Cachon & Swinney (2011) referred the fashionable design as highly fashionable or
trendy product design. They asserted that a fast fashion system combines quick response
production capabilities with enhanced product design capabilities to meet the latest consumer
tastes and match supply with certain demand. Some companies employed designers
throughout the world, built up a network of “trend-spotters” or followed closely the trend of
seasonal fashion show in Europe.
The model of Cachon & Swinney (2011) showed that fashionable design could increase
market share and customer value. According to Caro and Martınez-de-Albéniz (2014),
customers adopted fashions to show that they were “in”, and this fickle trend was increasingly
becoming more vital to retailers. However, the issue of creating fashionable products in
clothing industry has been paid less attention by people. The difficulties of drastically
redesigning the supply network caused some firms hard to focus on trendy design with
reducing production lead time (Meichtry, 2007).
12
3. Model and Hypothesis
3.1 Model
Warehouse theory illustrated that quick response is significant in supporting supply chain.
“4P” marketing theory indicated the influence of price to company’s performance. Based on
the theory and model of Caro and Martınez-de-Albéniz (2014), fashionable clothes, affordable
price, quick response and frequent assortment changes were included in fast fashion model.
We selected quick response, affordable price, fashionable design, and added brand to fast
fashion model.
In the model, partⅠis study of factors affecting Chinese consumers preference on fast
fashion industry. The independent variables (IV) are quick response, brand loyalty, affordable
price and fashionable design, which are used to measure the dependent variable (DV) fast
fashion companies’ performance from consumers’ perspective. PartⅡ is the application of
the results of corporates’ actual performance, which is considered from corporates’
perspective.
Corporates'
Performance
(from Companies'
Perspective)
Corporates'
Peformance (from
Consumers'
Perspective)
Quick Response
Brand
Affordable Price
Fashionable Design Part ⅡPart Ⅰ
IV DV
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3.2 Hypothesis
The hypotheses were used in partⅠ.
H1 From consumers’ perspectives, if other factors are equal, the quick response has a
positive correlation with the corporates’ performance.
H2 From consumers’ perspectives, if other factors are equal, consumers’ brand loyalty has
positive correlation with fast fashion corporates’performance.
H3 From consumers’ perspectives, if other factors are equal, the affordable price has a
positive correlation with the corporates’ performance.
H4 From consumers’ perspectives, if other factors are equal, the fashionable design has
positive correlation with fast fashion corporates’ performance.
4. Methodology
4.1 Subjects
The first part of the model used questionnaires to study consumers’ preference on fast
fashion brands. This research chose Chinese people as participants whose ages were larger
than 18. Considering the focus group of fast fashion products, the results of this research is
more representative of consumers aged between 18 and 40, who are not very old and also
have self-determination and related consumption capacity.
4.2 Sampling and Data Collection
This research identified a target population whose age were larger than 18, and then a
14
sample was used. The independent variables were transferred into quantitative index. The
seven-point Likert Scale method was applied. In order to make data more representative and
applicable, more than 400 questionnaires including both paper-based questionnaire and
web-based questionnaire are distributed for us to collect data. Before gathering data, a pilot
testing will be conducted to make sure the effectiveness of data collection, with size of 30
questionnaires distributed in campus.
4.3 Measurement
According to Mandy Sheridan, Christopher Moore & Karinna Nobbs (2006), from fast
fashion companies’ point of view, the principle of quick response is that demand data is
almost captured immediately and as close to the final customer as possible. Quick response
system is important to ensure that the company could response customers changing demand.
Hence the quick response can be measured by customers’ opinions about the degree to which
the fast fashion companies always provide the latest design and renew the products agilely
according to their changing demand. In the second part of the model, quick response were
studied from companies’ production and distribution lead time, and the time during receiving
market demand and designing products.
Brand strongly affects Chinese consumers’ attitude. The questions about brand loyalty
were asked firstly in the questionnaires. Respondents were required to choose the most
favorite fast fashion brand among Zara, H&M, Gap, Uniqlo, Benetton, Mango and MUJI.
Then the seven-point Likert Scale method was used to ask respondents the degree of their
willingness to buy products of that brand more frequently than those of other brands. The
15
degree was measured from very disagree to very agree, which included seven degrees. The
issue of brand was treated as brand value in the part Ⅱ, which included stock price, operation
scale, and cash flows attributable to branding.
Affordable price is measured by the degree (from very disagree to very agree) that
consumers accept that price of different fast fashion companies is affordable to them. The
range of affordable price accepted by consumers was studied. Considering the actual situation,
we adopted using second-hand material and going out to do first hand research. Interview to
the store staffs and observation during the field trip is the additional method to study the
influence of price in the second part.
Whether the product design is fashionable is difficult to measure because different
people have different perspective on definition of fashion. Since fashion is always the
trendiest design, fashion elements showed on the fashion week or fashion magazines, which
are widely accepted as fashionable products, are used to compare with fast fashion products.
Respondents were asked whether they thought the chosen brand’s product design reflected the
trendiest elements showed on the fashion week, fashion magazines or other media. The degree
is also measured from very disagree to very agree. For the second part, fashionable design can
be reflected on companies’ strategies and investments on fashionable design.
4.4 Model Analysis Method
This research tested the correlation coefficient between the dependent variable
companies’ performance and the independent variables including quick response, brand
loyalty, affordable price and fashionable design. T-test was used to figure out whether each
16
independent variable was significant at the 5% level to test H1 to H4.
A regression model was used to test the relationship between the four quantitative
independent variables and one quantitative dependent variable. The regression model is
developed as:
Yi = β0 + β1Xquii + β2Xbrai + β3 Xprii + β4Xfasi+ ε i.
In the formula, β is differential effects of corresponding factors, but β0 is the differential
effects of factors other than the four independent variables. Xquii, Xbrai, Xprii and Xfasi
represent for quick responses, brand loyalty, affordable price and fashionable design.
4.5 Apply the Results Back into Empirical Study
After the data results were gained and being analyzed, the research would then use the
results of companies’ performance perceived by customers and find out the implication to
apply back to companies’ performance from companies’ perspective, which became the
second part of the research. Since this research aimed at improving Chinese fast fashion
companies’ performance, companies should get some insights of what Chinese customers
really desire from their products and then operate their business accordingly, in order to truly
improve business performance which link to their profitability. The second part of this
research used observation, interview and referred other official materials such as companies’
annual reports.
The H&M shop in Yale Shopping Mall in 1066, Fenghuang South Road, Zhuhai,
Guangdong Province, China was selected as our main site of observation and interview,
because Yale Shopping Mall was the biggest and the only Mall that contained the most
17
number of fast fashion brands, including MUJI and Uniqlo and other non-fast fashion brands
such as 6ix8ight and Hotwind. Another two shops were also selected as sites of observation,
including H&M in Huafa Shopping Mall in 8 Zhuhai Avenue, Zhuhai, Guangdong Province
and ZARA in Kingglory Plaza in 2028, Renming South Road, Shenzhen, Guangdong
Province.
5. Analysis and Findings
5.1 Data Analysis of PartⅠ
5.1.1 Conclusion of Data Collection
402 out of 421 questionnaires were effective. 1
Considering the objectivity and
effectiveness of the results, most of the questionnaires were distributed through SOJUMP2
,
the biggest online platform in China to design questionnaire and collect date for academic or
business purposes. About 30 questionnaires were distributed in our campus. There are 14
questions in total in the questionnaire and the purposes of questions in the questionnaire are
listed in table 1.
5.1.2 Results and Analysis of Descriptive Data
About 69% respondents are female, which is within expectation because female
generally pay more attention to fashion clothes brands even if more and more male begin to
keep up with fashion, and some of the fast fashion brands provide mainly women products.
1
Those discarded questionnaires include not completed questionnaires, questionnaires whose respondents have no any idea
and experience of buying fast fashion products, some obviously invalid questionnaires such us all the same extreme answers
were chosen, or questionnaires whose respondents’ complete time is too short to be valid.
2
SOJUMP website: http://www.sojump.com/
18
Nearly 80% respondents’ ages are below 25, which may have impact of their monthly
income and hence the monthly spending on clothes (question 3) and the highest acceptable
price (question 13).
46% of the respondents have no idea about the term “fast fashion”; however they did
have so much experience of buying fast fashion products. It did not mean that fast fashion
brands welcomed by no one. In fact it just told that fast fashion brands are popular in Chinese
market but people in China did not realize that these types of welcomed brands are called by a
joint name: fast fashion. One of the objectives of this study is to try to provide more
knowledge about the term “fast fashion”.
The sorting question (question 5) of fast fashion brand aims to provide the popularity of
the brand and how customers satisfy with those brands. ZARA, H&M, Uniqlo and MUJI are
the top ones, and they are also the most famous ones and have most number of shops in
Chinese fast fashion market.
5.1.3 Results and Analysis of Regression Model
Among four independent variables, fashionable design is proved to be not significant in
regression model. Quick response, brand loyalty, and affordable price have positive
correlation with companies’ performance from consumers’ perspectives.
The regression model was conducted through the Statistical Package for Social Science
(SPSS). Question 6 in the questionnaire was used to collect data of dependent variable by
asking the degree of respondents’ overall preference of fast fashion products. The degree
should be assigned by respondents from 0% (unsatisfied) to 100% (satisfied). Question 7, 8, 9
and 10, which represent brand, quick response, affordable price and fashionable design
19
respectively, provided the measurement of independent variables. In order to measure those
IVs in detail, each question consists of several sub-questions. Seven-point Likert Scale is
applied to all those questions and the average point of those sub-questions are used as the
value of each IV.
Model Summary
R Square Adjusted R Square Std. Error of the Estimate
.711 .708 8.614
a. Predictors: (Constant), Quick response, Fashionable design, Affordable price, Brand
R square shows that 71.1% of the observed variability in the degree of dependent
variable is explained by the independent variables. It means that the data collected are useful
and reliable, because 71.1% is a relatively high percentage.
ANOVAb
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 72,406.759 4 18,101.690 243.935 .000a
Residual 29,460.149 397 74.207
Total 101,866.908 401
a. Predictors: (Constant), Quick response, Fashionable design, Affordable price, Brand
b. Dependent Variable: The degree of customers' preference
The result rejects the null hypothesis that there is no linear relationship between the
dependent variable and the independent variables. Thus this regression is meaningful as
F (4,397) =243.935, p<0.0005.
Coefficientsa
20
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig.B Std. Error Beta
1 (Constant) -4.250 2.444 -1.739 .083
Brand 6.510 2.365 .128 2.753 .006
Fashionable
design
3.791 2.138 .075 1.773 .077
Affordable price 10.391 2.512 .184 4.137 .000
Quick response 25.915 2.448 .530 10.587 .000
a. Dependent Variable: The degree of customers' preference
The variable fashionable design is excluded because p=0.077>0.05.
The hypothesis that H4: from consumers’ perspectives, if other factors are equal, the
fashionable design has positive correlation with fast fashion corporates’ performance is not
rejected.
Other null hypotheses were rejected since the p values of them were all less than 0.05,
which meant:
H1: From consumers’ perspectives, if other factors are equal, the quick response will have a
positive correlation with the corporates’ performance.
H2: From consumers’ perspectives, if other factors are equal, consumers’ brand loyalty has
positive correlation with fast fashion corporates’performance.
H3: From consumers’ perspectives, if other factors are equal, the affordable price will have a
positive correlation with the corporates’ performance.
Hence the regression model is:
21
The degree of customers’ overall preference of fast fashion brands =6.510Brand +
10.391Affordable price + 25.915Quick response.
It means that for an increase in 1 degree in brand loyalty of customers, there is an
increase in 6.51 degree of customers’ overall preference of fast fashion brands; for an increase
in 1 degree in affordable price fast fashion brands provide from customers’ perspective, there
is an increase in 10.391 degree of customers’ overall preference; for an increase in 1degree in
quick response that companies’ performed, there is an increase in 25.915 degree of customers’
overall preference of fast fashion brands.
5.2 Business Analysis of PartⅡ
5.2.1 Results and Analysis of Quick response
a. Results of Interview
In order to obtain information closer to reality, we have visited Yale Shopping Mall
located in Zhuhai, which includes H&M, Uniqlo, and MUJI3
. With store staffs’ approval, we
asked them several questions and collected information. Through their interview, it is clear
that the frequency of distributing new arrivals is nearly the same of all the brands, and they
normally replenish inventory and receive new arrivals once a week.
According to previous questionnaires, most of participants believed that the frequency of
providing new fast-fashion products was once a half of month (Chart 1). The expected
frequency of providing new arrivals was also once a half of month. Compared with the actual
satiation, we analyzed that customers held an under-valued impression and low expectation on
3
Zara is excluded in interview and observation since Zara do not have store in Zhuhai.
22
fast fashion companies’ quick response ability. Fast fashion companies perform better than
customers expected on distributing new products. It means that quick response is the basic
element in fast fashion industry and the frequency of once a week can meets most customers’
requirements.
b. Secondary Research
Based on the report of Caro and Martınez-de-Albéniz (2014), the revenue of Inditex4
,
H&M and other fast fashion retailers keep increasing from 2000 to 2012 (see Chart 2). The
Gap held a stable curve but still stayed on high revenue level. Selecting Zara, H&M, the Gap
and Uniqlo as examples, we acquire that their revenue in 2013 annual report are 16,724,439
euro, 16,014,603 euro, 14,978,884,800 euro, and 8,713,111,900 euro5
. Zara and H&M
perform better on their financial report than Gap and Uniqlo.
With the reference of Chart 3, Zara and H&M had more weekly new arrivals in the
women section in Fall 2013 than those of the Gap and Uniqlo. Even though the curves were
waved, Zara and H&M had larger numbers, which meant that they had more responses to
market demands and ensured customers have more choices on products. Moreover, it was
apparently that the curves of the Gap and Uniqlo were more stable than those of Zara and
H&M, therefore the change of weekly new product arrivals of Zara and H&M was larger and
more frequent. Zara and H&M adjusted their production better and quicker on providing new
arrivals than others. They provided more new arrivals on the peak season and provided less
new arrivals on the slack season.
Actually, Zara and H&M treat the characteristic of fashionable and multi-Varity products
4
Zara belongs to Inditex from Spain. The revenue of Zara is hard to be separated from Inditex’s annual report.
5
Zara, H&M, the Gap and Uniqlo can represent most of fast fashion brands, so they are selected as example. The figures of
their revenues are all changed to euro for comparing easily.
23
as core competence, while the Gap and Uniqlo prefer basic products with higher quality. Zara
and H&M pursue quick response to launch more new fashionable products. Their
performance on financial report is proved better than the Gap and Uniqlo, and quick response
plays an important part in it.
5.2.2 Results and Analysis of Brand
a. Results of Observation:
H&M in Yale Shopping Mall:
H&M was the first shop people could see when they went to mall. It had the largest area
among all shops. It was quite obvious that H&M had the most number of customers walking
in its shop and there were two long queues in front of cashier desk. There was also a long
queue in fitting room area, despite 16 fitting rooms were provided in that area, and on average
each people brought 3 clothes to the fitting room. Generally the shop was very crowded. 10
customers were observed and each was assigned an ID number. All of them were young ladies.
The results of those 10 customers were shown in Table 2.
People spent a lot of time in H&M shop with more than 35 minutes. The table also told
that nearly everyone brought more than one item in the shop.
Uniqlo was next to the H&M and they were the only two brands who have two floors.
However people in this shop were much less. Some people were fitting and purchasing
products but there was no queue in front of the cashier desk or fitting rooms. Generally the
environment in Uniqlo was not crowded. People in MUJI were more than in Uniqlo but still
much less than in H&M. Unlike previous two shops, customers in MUJI were more interested
in makeup and commodity such as cups, hangers, slippers and so forth since the area of those
24
collection were crowded. Few people tried the clothes in MUJI shop. Almost everyone bought
something other than clothes. People had to wait a little bit minutes when check out in MUJI.
H&M in Huafa Shopping Mall:
Among other brands such as Uniqlo and non-fast fashion brands including DKNY,
DAZZLE, GUESS, H&M had the most number of customers in its shop. In this shop, we saw
some whole families shopping, and even saw some foreigners. Some areas provided clothes
discount heavily but few people care about.
ZARA in Kingglory Plaza:
This shop is the earliest ZARA shop in Shenzhen. It was located in Kingglory Plaza,
together with other luxury brands such as Calvin Klein, HUGO BOSS, SISLEY and Lee. The
size of the shop was the biggest and there was the most number of people in the shop among
all clothes shops, but they could try and check out without queueing.
b. Annual Report
According to H&M annual report 2013 and 2014, H&M was growing rapidly and
continued to adopt expansion worldwide. In the first page of expansion worldwide section in
H&M annual report 2013, it asserted that H&M continues to grow in each market through
new stores and online sales. The company was expanding in existing markets and into new
countries, through all its brands and through new concepts (H&M Annual Report, 2013).
H&M has a strong presence and they will continue the presence especially in China.
In H&M annual report 2013, there was a single section called “increase presence in
China”, the details was that: “From Beijing to Guangzhou and from Chengdu to Shanghai,
H&M shopping bags are increasingly to be sighted among the people thronging China’s cities.
25
Growth is rapid in H&M’s biggest expansion market” (H&M Annual Report, 2013). It
asserted that in only a few years China has become the biggest market of H&M. This was true
since in 2013 many stores was opened not only in big cities but in many second- and third-tier
cities such as Nanjing, Wuxi, Zhengzhou and Huhhot. It is also more and more common to
see in the street that some people are wearing the same dress and some walking with H&M
shopping bags in their hands. Figures provided by the annual report 2014 also showed the
expansion in China. Among all 55 markets of H&M during 2014, China opened the most new
stores—86 new stores, followed by the U.S. market that opened 22 new stores. Others opened
no more than 20 stores. The sales and profits from 2010 to 2014 also demonstrate that
Chinese market contributed significantly.
c. Questionnaire
Question 5 in questionnaire showed that ZARA and H&M are the most popular brands in
China. Question 6, consists of five sub-questions also justify the observation—that is more
and more people in China know and have purchase experience of buying H&M and other fast
fashion brands. The second sub-question in question 6 has so obvious results that drew our
attention. The question is: Fast fashion brands have high awareness in China, and people
around me know some fast fashion brands or have buying experience. The results of this
question are shown in Chart 4.
This result is consistent with our previous findings: more and more people in China
know and have purchase experience of buying H&M and other fast fashion brands.
5.2.3 Results and Analysis of Affordable Price
a. Results of Observation
26
This observation was again mainly based on H&M in Yale Shopping Mall. Following
table were cut out from Table1. From this table, we could see that on average each person
spent more than 300 yuan and each item cost less than 200 yuan.
Average spending per person (RMB) 3,300/10 = 330
Average spending per clothes (RMB) 3,300/19 = 173.7
However it was quite common that a coat cost more than 300 yuan. This result was
consistent with the listed price. We found that for a normal t-shirt, the price was between 100
yuan to 399 yuan. The most expensive item in the shop was a thick jacket, which cost 699
yuan.
It was very interesting that most people wandered in the new arrival area. Although the
basic items were on sale and discount heavily, nearly no one wandered in basic items area.
The cheapest long underwear cost only 59 yuan, but it appears that nobody cared. Besides,
there were few people in male, kids, maternity dress or sports areas, which were placed in the
second floor. Each of those products in the second floor cost no more than 300 yuan. The
clothes of kids cost no more than 150 yuan. However, more customers in the basic areas of
Uniqlo and MUJI, despite the price of basics of MUJI and Uniqlo cost much more—around
300 yuan.
b. Findings from Questionnaire
Question 12 in the questionnaire asked respondents about the highest price of a normal
coat of fast fashion brands they could accept. Most people selected the range between 201
yuan to 400 yuan and 401 yuan to 600 yuan. That meant that if a normal coat cost more than
400 yuan, companies might have difficulty to sell it; if a normal coat cost more than 600, it
27
was highly likely that companies fail to sell it.
Question 3 in the questionnaire asked respondents about the average amount per month
spending on clothes. Most of the people selected the range from 201yuan to 500 yuan, not
very high. This was affected by respondents’ income and had influence on how much was
affordable. Since question 2 showed that most of the respondents were between 18 to 24 years
old, the results were not surprised.
Sub-question 4 of question 8 -- measurement of affordable price -- showed that most
people agreed that fast fashion brands had a larger discount percentage than other non-fast
fashion brands so that they could afford fast fashion products. But sub-question 3 that the
price of fast fashion brands products has more room to rise and they can accept that the price
of fast fashion brands goes up told that customer did not think the price of fast fashion
products had room to rise; if the price goes up, customers might not choose to buy.
Sub-question 2 demonstrated, however, that if the products have other advantages such
as a higher product quality or a fancy design, customers could still accept it.
5.2.4 Results and Analysis of Fashionable Design
According to our observation of H&M, Uniqlo and MUJI’s stores in Zhuhai, we found
that the main products of MUJI were basic products and the style was simple relatively.
Uniqlo’s clothing style was better than MUJI, but it also gave priority to casual clothing style.
H&M is the most fashionable one and it attracts more young people. During our observation,
there were more young people entering into fitting room in H&M than the other two.
From H&M’s annual report, it was apparent that H&M adopted “fashion for all” strategy
(H&M Annual Report, 2013). It was written that H&M provided a wide range of inspiring
28
fashion, from the latest trends to sustainable classics to wear season after season. H&M’s
designers obtained inspiration from films, art exhibitions and magazines, fashion from
catwalk to street and trend seminars. Most of people would agree that H&M’s products are
fashionable. Different from H&M, MUJI and Uniqlo preferred basic products and pursued
simple and environmental design concept.
6. Implication and Recommendation on Fast Fashion Companies’
Performance
Based on previous study of consumers’ preference of fast fashion companies’
performance, we got the result that brand, affordable price and quick response had linear
relationships with consumers’ preference. Among the three variables, quick response had the
greatest linear relationship and affordable price had the least linear relationship. Fashionable
design had been tested that it did not have linear relationship with consumers’ preference.
In order to compare the quantitative research with fast fashion companies’ actual
performance, we deeply studied the performance of the four independent variables which
were shown on companies’ annual report or other official websites. Since the first part of the
model measured consumers’ preference on the whole fast fashion industry’s performance, the
second part of the model focused on several leading brands in fast fashion industry and their
difference with the whole industry performance in consumers’ perspective. Using H&M as the
main brand, we also referred other brands’ data and situation in the report to better explain the
implication.
29
6.1 Quick Response
Quick response involves short production and distribution lead time. It reflects
company’s ability to quickly produce products that meet customers’ needs and to distribute
new arrivals to stores.
The figure in financial report showed that quick response had positive influence on fast
fashion companies’ performance. Though customers paid little attention on quick response
during our research and the frequency of providing new arrivals could satisfy most of
customers, quick response was also a significant factor in producing fashionable and various
products and improving sales revenues. Fast fashion companies can consider consumers’
expectation but it cannot be the reason to limit the ability of quick response.
H&M should persist in adopting quick response strategy since it matches H&M’s market
position. With quickly responding to market demand, H&M can provide various kinds of
fashionable products to attract customers. However, for MUJI and Uniqlo, whose main
products are basic products with better quality, they should adjust distribution lead time and
do not give too much component on quick response. The importance of quick response of
MUJI and Uniqlo is not as much as that of H&M and Zara, because basic products have
simple style and need not always change.
6.2 Brand
From customers’ perspective, brand loyalty was shown by customers’ forming a regular
habit to buy products of certain brands and thus customers were loyal to those brands (Singh
& Pattanayak, 2014). Kozinets et al (2002) believed that expansion could increase market
30
share and encourages customers to interact with the brand. Chinese people tend to go for
famous brands, and they like to wear clothes that known by many people. Normally large
number of stores in downtown area gain popularity since the stores in downtown is the main
source of gaining knowledge about those brands in China. That means that increase presence
help improve brand image. Hence they gain purchase experience and finally have chance to
regularly purchase.
The observation results, annual report and questionnaire data we collected all justified
that fast fashion companies in China should build customer loyalty by opening new stores in
best place to increase the presence so that to encourage customers to gain knowledge and
purchase experience and improve the degree of involvement. In this way can the market share
increase and sales increase.
6.3 Affordable Price
Affordable price is the price that accepted by consumers and not over-priced. Consumers
prefers affordable price when they picking fast fashion products. Companies should care
much about price setting since affordable price is one of a main factor that customers consider
when they choose brand. From customers’ perspective, fast fashion provides affordable price,
and if the companies can charge more without a big influence on sales, there may be some
room to rise for the price. Affordable price of fast fashion products attract more customers
compared with non-fast fashion products (Choi, 2013).
The observation results showed that it is unwise for company to set the price as low as
possible.
31
The affordable price allowed the customers to buy more. It means that with the same
amount of money, customers can buy more products in fast fashion brands than in other
brands. Therefore the price should not be set too high; normally the amount of a normal coat
below 600 is safer for company, as the questionnaire told. It is seems that customers take the
price of normal clothes between 200 and 400 for granted hence companies would better to try
to charge less than 400 yuan if possible. Customers want to use the limited amount of money
to try to buy more products, and actually this consumer group, who always want to pursue big
brands, do have limited amount of income. However it does not mean that all the items should
charge no more than 600. Companies can charge more for products’ other excellent features,
and surely this can be accepted by customers.
6.4 Fashionable Design
The issue of fashion varies from person to person. Some people prefer casual style and
believe it is fashion; some people appreciate sports style and think it is fashion. The opinions
of people participated our questionnaires are subjective. However, generally speaking, H&M
and Zara’s products are more “fashion”, because they provide more clothing styles and
collection, and follow fashion trend. It is also the reason why Zara and H&M take the leading
position in fast fashion industry.
It is suggested that fast fashion companies should clarify their strategy and position. For
the brands with characteristics of various kinds of fashionable products, they should insist
creating fashionable products which are accepted by most of people as fashion. For those
brans with the characteristics of providing simple basic products with high quality, they do
32
not need to strength the ability of creating fashionable styles and do not need to invest too
much on it.
7. Conclusion
Fast fashion companies are expanding in China. Though Chinese people do not have a
clear concept of fast fashion, they are being influenced by more and more fast fashion brands.
In order to reduce the gap, we first researched factors influencing their preference and then
the purchase intention. For this part, we mainly conducted the primary research—distributing
questionnaires. The result showed that the three independent variables--quick response, brand,
affordable price --have linear relationships with the dependent variable customers’ preference
except for fashionable design. Fashionable design is still one of an important considerations
but it may not significantly affect the customers’ preference.
Since companies must operate according to the market and customers, we further studied
this issue from operators’ perspective, which means, we converted the factors from customers’
perspective to operators’ perspective. For the second part, both primary and secondary
researches were conducted. Some official materials such as annual report and empirical
studies including observation and interview were referred and analyzed to obtain and
conclude the implication for companies, and those factors influencing customers’ preference
indeed had lots of implication for Chinese operators.
Fast fashion industry will definitely continue developing in China. As researchers, we
believe that this research could provide some insights for operators, and we hope that this
research will be further thoroughly studied in future.
33
8. Limitation
This research also has limitations as with other researches. There were seven main
limitations.
First of all, there was a lack of information about China. It attracted little academic
attention. The market of fast fashion brands in China had not developed completely and it was
more or less a new topic in China. There were limited resources about the operation of these
brands in China we could get. For example, we could not find the detailed financial statement
of the operators in China. Hence we had to look at the annual report which might include
some rough information about China.
Second, the brand we mentioned ignored their parent company since not all sub-brands
were in China market; however, some of the information of annual reports represented the
situation of parents.
Third, some official information of some fast fashion brands was presented in the
language of their hometown. For example, MUJI, the Japanese brand, always use Japanese to
demonstrate their information, so it is hard for us, who know little about Japanese, to
understand the content. There were also such problems in H&M and ZARA.
Next one is the distribution of questionnaire. Although we used the most authoritative
and diversified ways to distribute questionnaire, there was still some invalid questionnaires.
For example, although we distributed some questionnaires through public websites, some
questionnaires were distributed through our own social websites, which might attract the
respondents who had the same attributes.
34
Besides, the design of questionnaire also has limitation. For some respondents who
carelessly answered the questionnaire, the design of the questionnaire may already have
“guidance” on how to answer. To illustrate, respondents may answer the sorting problem
more or less according to how we listed.
Sixth, the position of observation and interview was limited. Due to the limited time and
other resources, we only chose Zhuhai and Shenzhen, instead of the whole China. Zhuhai has
limited number of fast fashion brands.
Finally, some factors influenced the measurement of the variables. From customers’
perspective, the independent variables included fashionable design, affordable price and so on,
which were so subjective that other factors might have influence on customers such as culture,
characteristics and so forth. There were also limited resources for us to convert the factors
from customers’ perspective to operators’ perspective.
35
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38
Appendices
Table 1: Role of each question in the questionnaire.
Q1, Q2 Attributes of the respondents: age and gender
Q3,Q11,Q12,Q13 Facts about respondents, provides useful data related to independent
variables
Q4 Respondents’ knowledge of the fast fashion, satisfies one of the
objectives
Q5 Ranks of fast fashion brands in view of respondents’.
Q6 Measurement of dependent variable
Q7, Q8, Q9, Q10 Measurement of independent variables
Q14 Open questions, provides useful data for industry
Table 2: Results of observation in H&M shop in Yale Shopping Mall
Customer ID 1 2 3 4 5 6 7 8 9 10 Total: 10
Time spent in
shop(minutes)
More than 35
Less than
15
—
Number of clothes
purchased
3 1 3 4 2 1 3 2 0 Total: 19
Product range New arrivals — —
Total spending(RMB) 600 300 650 500 250 150 500 350 0 0
Total:
3300
Average spending per person(RMB) 3300/10=330
Average spending per clothes(RMB) 3300/19=173.7
Average number of clothes purchased per person 19/10=1.9
39
Chart 1: Frequency of providing new fast fashion products
Chart 2: Select specialty apparel retailer revenues in 2000-2012. (Caro and
Martınez-de-Albéniz , 2014)
Twice
or more
than
twice a
week
Once a
week
Once a
half of
month
Once a
month
Once a
season
Once a
half of
year
Once a
year
Less
than
once a
year
No new
product
Consumers Believe 31 90 114 101 50 9 2 1 4
Consumers Hope 39 89 123 98 46 2 2 0 3
31
90
114
101
50
9
2
1
4
39
89
123
98
46
2
2 0
3
0
20
40
60
80
100
120
140
NumberofPeople
Frequency of Providing New Fast-fashion
Products
Consumers Believe Consumers Hope
40
Chart 3: Weekly new arrivals in the Women section in Fall 2013. (Caro and
Martınez-de-Albéniz , 2014)
Chart 4: Results of sub-question of question 6 in questionnaire: Fast fashion brands have high
awareness in China. People around me know some fast fashion brands or have buying
experience
0
20
40
60
80
100
120
strongly
disagree
disagree a little bit
disagree
neutral a little bit
agree
agree strongly
agree
41
The Survey of the Factors Affecting Chinese Consumers'
Preference on Fast Fashion Industry
Dear participants:
We are conducting this survey to find out customers’ preference on fast fashion products.
Thank you for spending time to participate in our survey about fast fashion company. All the
data you provide will be only used in statistics analysis and be held confidential. Please read
the questionnaire carefully and answer the following questions according to your situation.
Thanks for your cooperation.
For all the following questions, please use a “√” to select your answers.
Basic information:
1) Gender:1. □male 2. □female
2) Age: 1. □18~25 2. □26~32 3. □33~40 4.□Over 40
3) The average amount per month spending on clothes:
1.□Less than or equal to 200RMB 2.□201~500RMB 3.□501~1000RMB
4.□1001~2000RMB 5.□More than 2000RMB
4) Have you ever heard about the term” fast fashion”, or heard about the term’s another name
“high street fashion”? To what degree do you know about it?
(Fast fashion is a type of fashion business which has quick response production capabilities
and enhanced product design capabilities to produce the products that meet the latest trends.
Important brands in this industry include ZARA, H&M and so forth.)
1. □Never heard about it 2. □Know a little
3.□Have some knowledge 4. □Know it very well
5) From which of the following brands you are more willing to buy (please permute)?
□Zara □H&M □Gap □Uniqlo □MUJI
□Benetton □Mango □Others, please specify
6) In general, what is the degree of your preference of fast fashion brands? (please assign
percentage)
0(not prefer) ~100% (totally prefer)
Based on your knowledge of fast fashion brands, please answer the following questions.
42
(“1”= strongly disagree, “2”= disagree, “3”=neither agree nor disagree, “4”=agree,
“5”=strongly agree
Part 1 Brands
7) I buy fast fashion products more often than non-fast
fashion products.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
8) I am willing to pay close attention to fast fashion
brands’ related information, including new products’
information and related advertising information.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
9) I am willing to recommend fast fashion products to
other people.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
10) Fast fashion brands have high awareness in China.
People around me know some fast fashion brands or
have buying experience.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
11) If a fast fashion brand has a little negative
evaluation, probably I will not buy it.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
Part 2 Quick Response (shown as new products quickly arrives at stores and
products on the showcase are changed frequently even once or twice a week):
12) I can see the new products or updated products on
the showcase each time when I arrives the fast fashion
stores. I can see new products even once or twice a
week.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
13) The speed of changing garments according to
seasons is fast, and fast fashion companies can provide
the new season products much earlier than other
non-fast fashion companies.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
14) Fast fashion companies can always meets my
requirements of products quickly. The new fast fashion
products are necessary for customers and customers are
willing to try them.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
43
15) The time of hesitating to buy fast fashion products is
less than that of buying other products. One of the
reasons is that if I do not buy it this time, I will miss the
chance to buy it later because fast fashion companies
will quickly updates products and it will be replaced by
new products.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
Part 3 Affordable Price
16) The price of the fast fashion brands is more
reasonable, more acceptable and cheaper than that of
other non-fast fashion products.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
17) The price of fast fashion brands products is higher
than that of others, but if the products of fast fashion
brands have other advantages such as a higher product
quality or fancy design, I can still accept it.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
18) The price of fast fashion brands products has more
room to rise; I can accept that the price of fast fashion
brands goes up.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
19) Fast fashion brands have a larger discount
percentage than other non-fast fashion brands, so that I
can afford fast fashion products.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
Part 4 Fashionable Design
20) The products of fast fashion brand reflect the current
popular trend.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
21) The design of a fast fashion brand has a higher
novelty and has its own style.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
22) The products contain elements that can be found in
popular media such as magazine or fashion week.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
23) The fashionable design receives recognitions from
other people.
1.□ 2.□ 3.□ 4.□
5.□ 6.□ 7.□
44
24) I believe that the time period of providing new products or updating products is:
□Twice or more than twice a week
□Once a week
□Once a half of month
□Once a month
□Once a season
□Once a half of year
□Once a year
□Less than once a year
□No new product
25) I would like the time period of providing new products or updating products to be:
□Twice or more than twice a week
□Once a week
□Once a half of month
□Once a month
□Once a season
□Once a half of year
□Once a year
□Less than once a year
□No new product
26) What is the highest price of a normal coat of fast fashion brands you can accept?
□Below or equal to 200RMB
□201~400RMB
□401~600RMB
□601~800RMB
□801~1000RMB
□1001~1200RMB
□Above1200RMB
27). Which of the following factors also has influence on your purchase of fast fashion brands
products?(you may choose more than one options)
□High product quality
□Diversity of products
□Convenient store structure,easy to choose cloths and to go for fittings, for example
□High quality service from shop assistant, such as timely proper shop guidance
□Other factors(please fill in the blank)________
45
关于快时尚品牌的调查问卷
您好!感谢您在百忙之中抽出时间参加我们小组关于快时尚品牌的调查,我们调查的目的是了解消
费者对快时尚品牌的了解程度及偏好程度。您所提供的资料将只用于统计分析。请您认真阅读并根
据自身情况回答下列问题,谢谢合作!
基本信息:
1) 性别:1. □男 2. □女
2) 年龄:1. □18~25 岁 2. □26~32 岁 3. □33~40 岁 4. □40 岁以上
3) 每月平均服装花销:
1.□200 元及以下 2.□201~500 元 3.□501~1000 元
4.□1001~2000 元 5.□2000 元以上
4) 您听说过快时尚吗?对快时尚的了解程度是:
1. □完全没听说过 2. □了解很少 3. □了解一些 4. □非常了解
(快时尚产品始终追随当季潮流,新品的到店速度奇快,橱窗陈列的变换频率很高。快时尚以快、
狠、准为主要特征,带动了全球的时尚潮流。)
5) 您更愿意去哪个快时尚品牌商店买衣服,请给它们排序 (请在前面标上序号):
□Zara □H&M □Gap □Uniqlo (优衣库) □MUJI(无印良品) □Benetton □Mango
□其他,请写出
6)总体来说,您对快时尚产品的偏好程度所占的百分比是 (0%不满意~100%非常
满意)
请您根据自己对快时尚品牌的了解,回答下列问题。(“1”表示强烈不同意,“2”表示不同意,“3”表示
有点不同意,“4”表示一般,“5”表示有点同意,“6”表示同意,“7”表示强烈同意)
Part 1 品牌
7).相比起非快时尚品牌,我更经常买快时尚品牌的衣服 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
8).我很愿意关注快时尚品牌的相关信息,包括新产品信
息及相关广告信息等
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
9).我乐意向其他人推荐快时尚品牌的产品 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
46
10).快时尚品牌在中国有很高的知名度,身边很多人知道
或有购买经历
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
11).倘若该品牌有少许负面评价,我很可能还是会选择它 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
Part 2 对市场的快速响应(Quick response)(表现为新品到店速度快,橱窗陈列更换频率高,可
高到一周一次或两次等)
12).每次到店我都能看到有新产品上架或橱窗里更换新
产品,甚至每周或连续两周都能看到
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
13).快时尚品牌产品换季速度快,在季节更替前便能提供
下一季节的产品
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
14).快时尚品牌总能快速满足我对产品的需求,都是我需
要及愿意尝试的
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
15).对于决定是否选择购买该产品的迟疑时间比购买其
他产品时间少,其中一个原因是产品更新快、产品很快
被新产品取代因此可能会有错失购买机会
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
Part 3 价格可接受性
16).快时尚品牌的价格比其他非快时尚品牌的价格更公
道,更能让人接受
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
17).如果快时尚产品价格很高,但是有其他优势比如质量
好或设计独特,我也可以接受
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
18).快时尚品牌价格比其他品牌价格更有上升空间,或我
能接受该产品价格有小幅上涨
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
19).快时尚产品打折幅度大,以至于我有能力并愿意购买
很多产品
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
Part 4 时尚的设计
20).快时尚品牌产品能够反映当下的流行趋势 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
47
□
21).快时尚品牌产品的设计时尚新颖,有自己的时尚风格 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
22).快时尚品牌产品能体现在时尚媒体(杂志、时装周等)
上流行的时尚元素
1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
23).购买过的快时尚品牌的服装设计受到周围人的认可。 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
□
24).您认为快时尚品牌的新产品上架或更换产品的时间
周期一般为多久
□一周两次及以上 □一周一次
□半个月一次 □一个月一次
□一季度一次 □半年一次
□一年一次 □少于一年一次
□没有新产品上架
25).您希望新产品的到货周期或者产品的更换周期为 □一周两次及以上 □一周一次
□半个月一次 □一个月一次
□一季度一次 □半年一次
□一年一次 □少于一年一次
□没有新产品上架
26).您能接受的快时尚产品的最高价格为(以一件普通
外套为例)
□1200 以上 □1001~1200 □
801~1000 □601~800 元 □401~600 元
□201~400 元 □200 元以下
27).您认为下列哪些因素也影响您购买快时尚品牌产品(可多选):
□产品质量好
□产品多样化:产品品种、种类繁多
□门店结构方便,如便于挑选和试衣
□店员为顾客提供优质的服务,如导购、交款方便等
□其他(请您补充)__________

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Factors Affecting Chinese Consumers' Preference for Fast Fashion: A Case Study of H&M

  • 1. An Empirical Study on the Factors Affecting Chinese Consumers' Preference on Fast Fashion Industry and the Implication on the Fast Fashion Companies' Performance: the Case of H&M and Other Fast Fashion Companies' Operation in China BY NAN Shu 1130600098 Accounting ZHANG Lin 1130600179 Accounting A Business Project Submitted to the Division of Business and Management in Partial Fulfilment of the Graduation Requirement for the Degree of Bachelor of Business Administration (Honours) Beijing Normal University – Hong Kong Baptist University United International College April 2015
  • 2. 1 Acknowledgement We would like to especially thank our dearest supervisor Mr. Ben Wong. We are sincerely to express our gratitude and thankfulness to Mr. Ben Wong for all the great guidance and support given throughout the research process. In the last two semesters, Mr. Ben Wong has contributed his knowledge and valuable time to support our research and the success of this research has much to do with the contribution of our supervisor Mr. Ben Wong. We gratefully acknowledge all the participants and respondents who gave this research great help. Special thanks go to Dr. Peng Xiaoling, the lecturer of SPSS. She gave advice for conducting data analysis and helped to pointed out some problems, which we solved later. Special thanks also go to Mr. Gao, the shop assistant of MUJI, Miss. Ma, the shop assistant of Uniqlo, Miss Liu, shop assistant of H&M and Miss Li, cashier of H&M. They are all come from the shops in Yale Shopping Mall. We sincerely appreciate all participants’ and respondents’ cooperation and contribution.
  • 3. 2 Content An Empirical Study on the Factors Affecting Chinese Consumers' Preference on Fast Fashion Industry and the Implication on the Fast Fashion Companies' Performance: the Case of H&M and Other Fast Fashion Companies' Operation in China ........................................................... 0 Abstract ...................................................................................................................................... 4 1. Introduction ......................................................................................................................... 5 1.1 Statement of Problem: Background and Motivation ................................... 5 1.2 What is Gap and Objective.......................................................................... 6 2. Literature Review................................................................................................................ 7 2.1 Corporate Performance (from Company’s Perspective).............................. 7 2.2 Dependent Variable...................................................................................... 8 2.3 Independent Variable ................................................................................... 8 2.3.1 Quick Response................................................................................. 9 2.3.2 Brand ................................................................................................. 9 2.3.3 Affordable Price .............................................................................. 10 2.3.4 Fashionable Design ..........................................................................11 3. Model and Hypothesis....................................................................................................... 12 3.1 Model......................................................................................................... 12 3.2 Hypothesis ................................................................................................. 13 4. Methodology ..................................................................................................................... 13 4.1 Subjects...................................................................................................... 13 4.2 Sampling and Data Collection................................................................... 13 4.3 Measurement.............................................................................................. 14 4.4 Model Analysis Method............................................................................. 15 4.5 Apply the Results Back into Empirical Study ........................................... 16 5. Analysis and Findings ....................................................................................................... 17 5.1 Data Analysis of PartⅠ ............................................................................. 17 5.1.1 Conclusion of Data Collection ........................................................ 17 5.1.2 Results and Analysis of Descriptive Data ....................................... 17
  • 4. 3 5.1.3 Results and Analysis of Regression Model..................................... 18 5.2 Business Analysis of PartⅡ....................................................................... 21 5.2.1 Results and Analysis of Quick response ......................................... 21 5.2.2 Results and Analysis of Brand ........................................................ 23 5.2.3 Results and Analysis of Affordable Price........................................ 25 5.2.4 Results and Analysis of Fashionable Design................................... 27 6. Implication and Recommendation on Fast Fashion Companies’ Performance................. 28 6.1 Quick Response ......................................................................................... 29 6.2 Brand.......................................................................................................... 29 6.3 Affordable Price......................................................................................... 30 6.4 Fashionable Design.................................................................................... 31 7. Conclusion......................................................................................................................... 32 8. Limitation.......................................................................................................................... 33 Reference.................................................................................................................................. 35 Appendices............................................................................................................................... 38
  • 5. 4 Abstract The market of fast fashion brands in China is growing rapidly, and foreign fast fashion brands continue to consider China as the main market of expansion; at the same time, Chinese customers demand higher level of products of fast fashion companies. Thus, this research used primary research to gather information about customers’ preference of fast fashion brands and applied the results to the operations. Brand loyalty, affordable price,fashionable design and quick response are the factors affecting customers’ preference towards those brands. They provide implications, which becomes the second part of the report and gained by primary and secondary research, that fast fashion companies in China should adopt expansion strategy, keep the price affordable within a certain range and response quickly towards consumers’ demand. This research in fact focuses more on the second part. The first part is used as a guidance to obtain fast fashion business operating practices and implications. The approach of the second part analysis is around the four independent variables. Key Words: fast fashion, quick response, brand, affordable price, fashionable design, H&M, consumers’ preference, companies’ performance
  • 6. 5 1. Introduction 1.1 Statement of Problem: Background and Motivation Fast fashion production is welcomed by consumers because it allows mainstream consumers to buy the latest fashion trends at affordable prices. Based on the competitive advantages, fast fashion industry has a rapid growth in many countries. For example, Inditex, the parent company of ZARA, started its first store in Spain in 1975 and is now operating in 87 markets with over 6000 stores in 2013 (Inditex group annual report, 2013). Fast fashion industry has developed in western countries for many years, but fast fashion does not have a long history in China and it is still in developing stage. With the rapid development of Chinese business, Chinese consumers have more choice on selecting their favorite products. Fast fashion companies in China are challenged by more and more new entering fast fashion brand and developing electronic business in clothing industry. Chinese consumers can choose cheaper and fashionable products on the Internet with more comfortable way. Therefore, fast fashion companies thirst in expanding their market shares to improve operational performance, especially in China market. Thought fast fashion companies have competitive advantages when it comes to China, Chinese consumers lack the knowledge about fast fashion products and they cannot tell the difference between fast fashion industry and non-fast fashion industry. Fast fashion is a business strategy that aims to reduce the processes involved in the buying cycle and lead times for getting new fashion product into stores, in order to satisfy consumer demand at its peak (Barnes & Lea-Greenwood, 2006). Fast fashion industry has the characteristics of quick
  • 7. 6 response production capabilities and enhanced product design capabilities to produce the products that meet the latest trends of consumers’ need (Cachon, & Swinney, 2011). Fast fashion products are exploited with the minimum lead time during the whole procedure. Consumers can benefit from fast fashion system with frequently updated and fashionable products. 1.2 What is Gap and Objective Fast fashion industry has long history in developed countries. Companies like ZARA, Hennes & Mauritz (H&M), which come from Europe, and the Gap Inc., which comes from the US, have gained growing popularity in the world. As one of the major economy markets in the world, China is also an important market for fast fashion industry. With competition in more mature American and European markets stiffening and economies in recession, fast fashion is looking forward to expand in new growth markets around the world. Fast fashion brands quickly welcomed by Chinese customers in the past decade. At the same time, Chinese customers become more demanding and show higher expectations on fast fashion products. However, fast fashion’ strategies in China cause some problems. There is an intensive demand of Chinese customers for fast fashion products; in the meanwhile, fast fashion companies encounter some bottleneck problems in meeting Chinese market. Hence a gap arises here. It is necessary for fast fashion companies to overcome problems in China’s market since China’s market takes a large market share in the world. Besides, fast fashion receives a little academic attention (Barnes & Lea-Greenwood, 2006). Many literature reviews consider neither the linkage between customers’ preference and companies’
  • 8. 7 performance nor the linkage between Chinese markets and fast fashion industry, which would lead to some implications on Chinese fast fashion brands. Both of the linkages are important. The objective of the report is to reduce the gap between Chinese customers and flagship fast fashion brands, giving more advices to companies on meeting consumers’ preference and improving operating performance in China. In order to fill up this gap, this paper aims at providing a thorough analysis of fast fashion industry and implications on operations in Chinese market by providing models which links customers’ preference and fast fashion companies’ performance. For concrete and practice, cases of H&M and other famous global fast fashion companies which also most welcomed by China are provided. Through two part of the report, we try to achieve the relationship between the factors influencing consumers’ preference and fast fashion companies’ performance from consumers’ perspective and companies’ perspective. Deeper research is conducted by analyzing the relationship, which is gained by doing primary and secondary research. 2. Literature Review 2.1 Corporate Performance (from Company’s Perspective) According to SG. Hayes and Nicola Jones (2006), fast fashion companies’ performance could be measured by sales, retained profits, or some other ratios. Those results were showed on companies’ financial reports or annual reports, which directly reflected corporates’ financial performance. In addition, according to Kozinets, Sherry, DeBerry-Spence, Duhachek, Nuttavuthisit & Storm (2002), market shares could be increased by expansion and customers were encouraged to interact with brand to increase market shares. Corporates’ performance
  • 9. 8 could be evaluated by market shares taken by each corporate. The flagship brand stores with better corporate performance always take a large part of market shares. 2.2 Dependent Variable Corporate Performance (from Consumers’ Perspective) Thamaraiselvan and Raja (2008) reported that brand extension of fast moving consumer goods was evaluated by consumers, and consumers’ evaluation would have influence on it. Then Choi, Liu, Mark, and To (2010) raised that brand extension was a product line extension marketed under the same general brand and consumers’ attitude incurred effects towards brand extension. This research studies the corporate performance as the brand extension influencing by consumers’ attitude. The corporate performance from consumers’ perspective is measured by consumers’ preference, which is how well consumers evaluate fast fashion companies’ performance. It reflects on how much purchase experience consumers have and how often they purchase on fast fashion stores. 2.3 Independent Variable The consumers’ preference on this research referred to those Chinese customers who prefer buying fast fashion products. This research aimed at analyzing the factors affecting customers’ preference on fast fashion products. The independent variables were determined based on the theory and model of Caro and Martınez-de-Albéniz (2014), who defined the fast fashion business model as the combination of (i) fashionable clothes mostly for consumers under 40; (ii) affordable prices in the mid-to-low range; (iii) quick response; and (iv) frequent assortment changes. Considering the practice in China market, brand is more important factor
  • 10. 9 than frequent assortment changes affecting Chinese customers’ preference towards fast fashion. Therefore it is included in the independent variables. 2.3.1 Quick Response According to Caro and Martınez-de-Albéniz (2014), the definition of quick response is postponing risky production decisions, which allows companies to reduce finished goods excess inventory. Fast fashion business model consists of trendy products mainly for customers under 40, affordable prices, quick response, and frequent assortment changes. The warehouse theory supports that quick response is included in fast fashion business model. Efficient storage, re-working, pick and pack in warehousing enables company quickly response to customers’ requirement, which is significant in companies’ supply chain. Quick response must be part of a fast fashion system, because short production and distribution lead times enables customers to actively buy trendy products (Cachon & Swinney, 2011). It means that companies reduce the time to react to market demand, and customers will be easier to be pleased with the quickly updated trendy products. Ghemawat and Nueno (2003) also emphasized that quick response capabilities underlies this business performance. H&M and Zara have used quick-response production to reach stores as soon as possible, thereby allowing them to respond to nascent demand trends first, so as to provide and capture more value from the consumers (Caro and Martınez-de-Albéniz,2014). 2.3.2 Brand According to Cheng and Chi (2009), brand loyalty generally indicates that customers repeatedly purchase a good or service over time and customers hold favorable attitudes
  • 11. 10 towards a good or service, or towards the company supplying the good or service. The brand loyalty of Chinese customers to fast fashion is considered a little, but it is a necessary factor of Chinese customers' preference. Today’s fast fashion leaders – like H&M and Zara, have gained a significant marker shares in China. Ke (2010) also alleged that because they are the first brands moving to China, including Uniqlo and C&A, fast fashion brands captured a sizeable share of the market early on. These brand images brought a huge number of fans in Mainland China to fast fashion companies. According to Choi et al. (2010), brand concept consistency, which was included in brand loyalty, was the most important area in affecting the consumers’ attitudes towards Zara. From companies’ perspective, however, brand loyalty of customers is a kind of value, equity or asset. Hence brand value significantly affects companies’ financial performance. MIZIK (2014) found that advertising spending or cash flows attributable to brands were used as an indication of brand equity by many companies. The stock returns should be applied to evaluate the brand equity since assets related to brands actually have long-term financial impact (Barth, Clement, Fosthr & Kasznik, 1998). According to Kozinets, Sherry, DeBerry-Spence, Duhachek, Nuttavuthisit & Storm (2002), a store or shop encourages customers to interact with the brand by showing fancy collections or other displays. Increasing the number of such stores can achieve the aim of improve brand values. 2.3.3 Affordable Price The research is based on the fast fashion market in China. It is necessary to firstly include one of the important factors on the marketing “4P” theory—Price (others are product, promotion and place). Affordable price of fast fashion products attract more customers
  • 12. 11 compared with non-fast fashion products (Choi, 2013). According to Caro and Martınez-de-Albéniz (2014), fast fashion companies always sell products at affordable price, considering customers’ preference on cheap fashion. Affordable price is an important element in defining fast fashion. Affordable price is the price that are not over-priced and welcomed by consumers. Consumers prefers affordable price when they are picking fast fashion products. 2.3.4 Fashionable Design Cachon & Swinney (2011) referred the fashionable design as highly fashionable or trendy product design. They asserted that a fast fashion system combines quick response production capabilities with enhanced product design capabilities to meet the latest consumer tastes and match supply with certain demand. Some companies employed designers throughout the world, built up a network of “trend-spotters” or followed closely the trend of seasonal fashion show in Europe. The model of Cachon & Swinney (2011) showed that fashionable design could increase market share and customer value. According to Caro and Martınez-de-Albéniz (2014), customers adopted fashions to show that they were “in”, and this fickle trend was increasingly becoming more vital to retailers. However, the issue of creating fashionable products in clothing industry has been paid less attention by people. The difficulties of drastically redesigning the supply network caused some firms hard to focus on trendy design with reducing production lead time (Meichtry, 2007).
  • 13. 12 3. Model and Hypothesis 3.1 Model Warehouse theory illustrated that quick response is significant in supporting supply chain. “4P” marketing theory indicated the influence of price to company’s performance. Based on the theory and model of Caro and Martınez-de-Albéniz (2014), fashionable clothes, affordable price, quick response and frequent assortment changes were included in fast fashion model. We selected quick response, affordable price, fashionable design, and added brand to fast fashion model. In the model, partⅠis study of factors affecting Chinese consumers preference on fast fashion industry. The independent variables (IV) are quick response, brand loyalty, affordable price and fashionable design, which are used to measure the dependent variable (DV) fast fashion companies’ performance from consumers’ perspective. PartⅡ is the application of the results of corporates’ actual performance, which is considered from corporates’ perspective. Corporates' Performance (from Companies' Perspective) Corporates' Peformance (from Consumers' Perspective) Quick Response Brand Affordable Price Fashionable Design Part ⅡPart Ⅰ IV DV
  • 14. 13 3.2 Hypothesis The hypotheses were used in partⅠ. H1 From consumers’ perspectives, if other factors are equal, the quick response has a positive correlation with the corporates’ performance. H2 From consumers’ perspectives, if other factors are equal, consumers’ brand loyalty has positive correlation with fast fashion corporates’performance. H3 From consumers’ perspectives, if other factors are equal, the affordable price has a positive correlation with the corporates’ performance. H4 From consumers’ perspectives, if other factors are equal, the fashionable design has positive correlation with fast fashion corporates’ performance. 4. Methodology 4.1 Subjects The first part of the model used questionnaires to study consumers’ preference on fast fashion brands. This research chose Chinese people as participants whose ages were larger than 18. Considering the focus group of fast fashion products, the results of this research is more representative of consumers aged between 18 and 40, who are not very old and also have self-determination and related consumption capacity. 4.2 Sampling and Data Collection This research identified a target population whose age were larger than 18, and then a
  • 15. 14 sample was used. The independent variables were transferred into quantitative index. The seven-point Likert Scale method was applied. In order to make data more representative and applicable, more than 400 questionnaires including both paper-based questionnaire and web-based questionnaire are distributed for us to collect data. Before gathering data, a pilot testing will be conducted to make sure the effectiveness of data collection, with size of 30 questionnaires distributed in campus. 4.3 Measurement According to Mandy Sheridan, Christopher Moore & Karinna Nobbs (2006), from fast fashion companies’ point of view, the principle of quick response is that demand data is almost captured immediately and as close to the final customer as possible. Quick response system is important to ensure that the company could response customers changing demand. Hence the quick response can be measured by customers’ opinions about the degree to which the fast fashion companies always provide the latest design and renew the products agilely according to their changing demand. In the second part of the model, quick response were studied from companies’ production and distribution lead time, and the time during receiving market demand and designing products. Brand strongly affects Chinese consumers’ attitude. The questions about brand loyalty were asked firstly in the questionnaires. Respondents were required to choose the most favorite fast fashion brand among Zara, H&M, Gap, Uniqlo, Benetton, Mango and MUJI. Then the seven-point Likert Scale method was used to ask respondents the degree of their willingness to buy products of that brand more frequently than those of other brands. The
  • 16. 15 degree was measured from very disagree to very agree, which included seven degrees. The issue of brand was treated as brand value in the part Ⅱ, which included stock price, operation scale, and cash flows attributable to branding. Affordable price is measured by the degree (from very disagree to very agree) that consumers accept that price of different fast fashion companies is affordable to them. The range of affordable price accepted by consumers was studied. Considering the actual situation, we adopted using second-hand material and going out to do first hand research. Interview to the store staffs and observation during the field trip is the additional method to study the influence of price in the second part. Whether the product design is fashionable is difficult to measure because different people have different perspective on definition of fashion. Since fashion is always the trendiest design, fashion elements showed on the fashion week or fashion magazines, which are widely accepted as fashionable products, are used to compare with fast fashion products. Respondents were asked whether they thought the chosen brand’s product design reflected the trendiest elements showed on the fashion week, fashion magazines or other media. The degree is also measured from very disagree to very agree. For the second part, fashionable design can be reflected on companies’ strategies and investments on fashionable design. 4.4 Model Analysis Method This research tested the correlation coefficient between the dependent variable companies’ performance and the independent variables including quick response, brand loyalty, affordable price and fashionable design. T-test was used to figure out whether each
  • 17. 16 independent variable was significant at the 5% level to test H1 to H4. A regression model was used to test the relationship between the four quantitative independent variables and one quantitative dependent variable. The regression model is developed as: Yi = β0 + β1Xquii + β2Xbrai + β3 Xprii + β4Xfasi+ ε i. In the formula, β is differential effects of corresponding factors, but β0 is the differential effects of factors other than the four independent variables. Xquii, Xbrai, Xprii and Xfasi represent for quick responses, brand loyalty, affordable price and fashionable design. 4.5 Apply the Results Back into Empirical Study After the data results were gained and being analyzed, the research would then use the results of companies’ performance perceived by customers and find out the implication to apply back to companies’ performance from companies’ perspective, which became the second part of the research. Since this research aimed at improving Chinese fast fashion companies’ performance, companies should get some insights of what Chinese customers really desire from their products and then operate their business accordingly, in order to truly improve business performance which link to their profitability. The second part of this research used observation, interview and referred other official materials such as companies’ annual reports. The H&M shop in Yale Shopping Mall in 1066, Fenghuang South Road, Zhuhai, Guangdong Province, China was selected as our main site of observation and interview, because Yale Shopping Mall was the biggest and the only Mall that contained the most
  • 18. 17 number of fast fashion brands, including MUJI and Uniqlo and other non-fast fashion brands such as 6ix8ight and Hotwind. Another two shops were also selected as sites of observation, including H&M in Huafa Shopping Mall in 8 Zhuhai Avenue, Zhuhai, Guangdong Province and ZARA in Kingglory Plaza in 2028, Renming South Road, Shenzhen, Guangdong Province. 5. Analysis and Findings 5.1 Data Analysis of PartⅠ 5.1.1 Conclusion of Data Collection 402 out of 421 questionnaires were effective. 1 Considering the objectivity and effectiveness of the results, most of the questionnaires were distributed through SOJUMP2 , the biggest online platform in China to design questionnaire and collect date for academic or business purposes. About 30 questionnaires were distributed in our campus. There are 14 questions in total in the questionnaire and the purposes of questions in the questionnaire are listed in table 1. 5.1.2 Results and Analysis of Descriptive Data About 69% respondents are female, which is within expectation because female generally pay more attention to fashion clothes brands even if more and more male begin to keep up with fashion, and some of the fast fashion brands provide mainly women products. 1 Those discarded questionnaires include not completed questionnaires, questionnaires whose respondents have no any idea and experience of buying fast fashion products, some obviously invalid questionnaires such us all the same extreme answers were chosen, or questionnaires whose respondents’ complete time is too short to be valid. 2 SOJUMP website: http://www.sojump.com/
  • 19. 18 Nearly 80% respondents’ ages are below 25, which may have impact of their monthly income and hence the monthly spending on clothes (question 3) and the highest acceptable price (question 13). 46% of the respondents have no idea about the term “fast fashion”; however they did have so much experience of buying fast fashion products. It did not mean that fast fashion brands welcomed by no one. In fact it just told that fast fashion brands are popular in Chinese market but people in China did not realize that these types of welcomed brands are called by a joint name: fast fashion. One of the objectives of this study is to try to provide more knowledge about the term “fast fashion”. The sorting question (question 5) of fast fashion brand aims to provide the popularity of the brand and how customers satisfy with those brands. ZARA, H&M, Uniqlo and MUJI are the top ones, and they are also the most famous ones and have most number of shops in Chinese fast fashion market. 5.1.3 Results and Analysis of Regression Model Among four independent variables, fashionable design is proved to be not significant in regression model. Quick response, brand loyalty, and affordable price have positive correlation with companies’ performance from consumers’ perspectives. The regression model was conducted through the Statistical Package for Social Science (SPSS). Question 6 in the questionnaire was used to collect data of dependent variable by asking the degree of respondents’ overall preference of fast fashion products. The degree should be assigned by respondents from 0% (unsatisfied) to 100% (satisfied). Question 7, 8, 9 and 10, which represent brand, quick response, affordable price and fashionable design
  • 20. 19 respectively, provided the measurement of independent variables. In order to measure those IVs in detail, each question consists of several sub-questions. Seven-point Likert Scale is applied to all those questions and the average point of those sub-questions are used as the value of each IV. Model Summary R Square Adjusted R Square Std. Error of the Estimate .711 .708 8.614 a. Predictors: (Constant), Quick response, Fashionable design, Affordable price, Brand R square shows that 71.1% of the observed variability in the degree of dependent variable is explained by the independent variables. It means that the data collected are useful and reliable, because 71.1% is a relatively high percentage. ANOVAb Model Sum of Squares df Mean Square F Sig. 1 Regression 72,406.759 4 18,101.690 243.935 .000a Residual 29,460.149 397 74.207 Total 101,866.908 401 a. Predictors: (Constant), Quick response, Fashionable design, Affordable price, Brand b. Dependent Variable: The degree of customers' preference The result rejects the null hypothesis that there is no linear relationship between the dependent variable and the independent variables. Thus this regression is meaningful as F (4,397) =243.935, p<0.0005. Coefficientsa
  • 21. 20 Model Unstandardized Coefficients Standardized Coefficients t Sig.B Std. Error Beta 1 (Constant) -4.250 2.444 -1.739 .083 Brand 6.510 2.365 .128 2.753 .006 Fashionable design 3.791 2.138 .075 1.773 .077 Affordable price 10.391 2.512 .184 4.137 .000 Quick response 25.915 2.448 .530 10.587 .000 a. Dependent Variable: The degree of customers' preference The variable fashionable design is excluded because p=0.077>0.05. The hypothesis that H4: from consumers’ perspectives, if other factors are equal, the fashionable design has positive correlation with fast fashion corporates’ performance is not rejected. Other null hypotheses were rejected since the p values of them were all less than 0.05, which meant: H1: From consumers’ perspectives, if other factors are equal, the quick response will have a positive correlation with the corporates’ performance. H2: From consumers’ perspectives, if other factors are equal, consumers’ brand loyalty has positive correlation with fast fashion corporates’performance. H3: From consumers’ perspectives, if other factors are equal, the affordable price will have a positive correlation with the corporates’ performance. Hence the regression model is:
  • 22. 21 The degree of customers’ overall preference of fast fashion brands =6.510Brand + 10.391Affordable price + 25.915Quick response. It means that for an increase in 1 degree in brand loyalty of customers, there is an increase in 6.51 degree of customers’ overall preference of fast fashion brands; for an increase in 1 degree in affordable price fast fashion brands provide from customers’ perspective, there is an increase in 10.391 degree of customers’ overall preference; for an increase in 1degree in quick response that companies’ performed, there is an increase in 25.915 degree of customers’ overall preference of fast fashion brands. 5.2 Business Analysis of PartⅡ 5.2.1 Results and Analysis of Quick response a. Results of Interview In order to obtain information closer to reality, we have visited Yale Shopping Mall located in Zhuhai, which includes H&M, Uniqlo, and MUJI3 . With store staffs’ approval, we asked them several questions and collected information. Through their interview, it is clear that the frequency of distributing new arrivals is nearly the same of all the brands, and they normally replenish inventory and receive new arrivals once a week. According to previous questionnaires, most of participants believed that the frequency of providing new fast-fashion products was once a half of month (Chart 1). The expected frequency of providing new arrivals was also once a half of month. Compared with the actual satiation, we analyzed that customers held an under-valued impression and low expectation on 3 Zara is excluded in interview and observation since Zara do not have store in Zhuhai.
  • 23. 22 fast fashion companies’ quick response ability. Fast fashion companies perform better than customers expected on distributing new products. It means that quick response is the basic element in fast fashion industry and the frequency of once a week can meets most customers’ requirements. b. Secondary Research Based on the report of Caro and Martınez-de-Albéniz (2014), the revenue of Inditex4 , H&M and other fast fashion retailers keep increasing from 2000 to 2012 (see Chart 2). The Gap held a stable curve but still stayed on high revenue level. Selecting Zara, H&M, the Gap and Uniqlo as examples, we acquire that their revenue in 2013 annual report are 16,724,439 euro, 16,014,603 euro, 14,978,884,800 euro, and 8,713,111,900 euro5 . Zara and H&M perform better on their financial report than Gap and Uniqlo. With the reference of Chart 3, Zara and H&M had more weekly new arrivals in the women section in Fall 2013 than those of the Gap and Uniqlo. Even though the curves were waved, Zara and H&M had larger numbers, which meant that they had more responses to market demands and ensured customers have more choices on products. Moreover, it was apparently that the curves of the Gap and Uniqlo were more stable than those of Zara and H&M, therefore the change of weekly new product arrivals of Zara and H&M was larger and more frequent. Zara and H&M adjusted their production better and quicker on providing new arrivals than others. They provided more new arrivals on the peak season and provided less new arrivals on the slack season. Actually, Zara and H&M treat the characteristic of fashionable and multi-Varity products 4 Zara belongs to Inditex from Spain. The revenue of Zara is hard to be separated from Inditex’s annual report. 5 Zara, H&M, the Gap and Uniqlo can represent most of fast fashion brands, so they are selected as example. The figures of their revenues are all changed to euro for comparing easily.
  • 24. 23 as core competence, while the Gap and Uniqlo prefer basic products with higher quality. Zara and H&M pursue quick response to launch more new fashionable products. Their performance on financial report is proved better than the Gap and Uniqlo, and quick response plays an important part in it. 5.2.2 Results and Analysis of Brand a. Results of Observation: H&M in Yale Shopping Mall: H&M was the first shop people could see when they went to mall. It had the largest area among all shops. It was quite obvious that H&M had the most number of customers walking in its shop and there were two long queues in front of cashier desk. There was also a long queue in fitting room area, despite 16 fitting rooms were provided in that area, and on average each people brought 3 clothes to the fitting room. Generally the shop was very crowded. 10 customers were observed and each was assigned an ID number. All of them were young ladies. The results of those 10 customers were shown in Table 2. People spent a lot of time in H&M shop with more than 35 minutes. The table also told that nearly everyone brought more than one item in the shop. Uniqlo was next to the H&M and they were the only two brands who have two floors. However people in this shop were much less. Some people were fitting and purchasing products but there was no queue in front of the cashier desk or fitting rooms. Generally the environment in Uniqlo was not crowded. People in MUJI were more than in Uniqlo but still much less than in H&M. Unlike previous two shops, customers in MUJI were more interested in makeup and commodity such as cups, hangers, slippers and so forth since the area of those
  • 25. 24 collection were crowded. Few people tried the clothes in MUJI shop. Almost everyone bought something other than clothes. People had to wait a little bit minutes when check out in MUJI. H&M in Huafa Shopping Mall: Among other brands such as Uniqlo and non-fast fashion brands including DKNY, DAZZLE, GUESS, H&M had the most number of customers in its shop. In this shop, we saw some whole families shopping, and even saw some foreigners. Some areas provided clothes discount heavily but few people care about. ZARA in Kingglory Plaza: This shop is the earliest ZARA shop in Shenzhen. It was located in Kingglory Plaza, together with other luxury brands such as Calvin Klein, HUGO BOSS, SISLEY and Lee. The size of the shop was the biggest and there was the most number of people in the shop among all clothes shops, but they could try and check out without queueing. b. Annual Report According to H&M annual report 2013 and 2014, H&M was growing rapidly and continued to adopt expansion worldwide. In the first page of expansion worldwide section in H&M annual report 2013, it asserted that H&M continues to grow in each market through new stores and online sales. The company was expanding in existing markets and into new countries, through all its brands and through new concepts (H&M Annual Report, 2013). H&M has a strong presence and they will continue the presence especially in China. In H&M annual report 2013, there was a single section called “increase presence in China”, the details was that: “From Beijing to Guangzhou and from Chengdu to Shanghai, H&M shopping bags are increasingly to be sighted among the people thronging China’s cities.
  • 26. 25 Growth is rapid in H&M’s biggest expansion market” (H&M Annual Report, 2013). It asserted that in only a few years China has become the biggest market of H&M. This was true since in 2013 many stores was opened not only in big cities but in many second- and third-tier cities such as Nanjing, Wuxi, Zhengzhou and Huhhot. It is also more and more common to see in the street that some people are wearing the same dress and some walking with H&M shopping bags in their hands. Figures provided by the annual report 2014 also showed the expansion in China. Among all 55 markets of H&M during 2014, China opened the most new stores—86 new stores, followed by the U.S. market that opened 22 new stores. Others opened no more than 20 stores. The sales and profits from 2010 to 2014 also demonstrate that Chinese market contributed significantly. c. Questionnaire Question 5 in questionnaire showed that ZARA and H&M are the most popular brands in China. Question 6, consists of five sub-questions also justify the observation—that is more and more people in China know and have purchase experience of buying H&M and other fast fashion brands. The second sub-question in question 6 has so obvious results that drew our attention. The question is: Fast fashion brands have high awareness in China, and people around me know some fast fashion brands or have buying experience. The results of this question are shown in Chart 4. This result is consistent with our previous findings: more and more people in China know and have purchase experience of buying H&M and other fast fashion brands. 5.2.3 Results and Analysis of Affordable Price a. Results of Observation
  • 27. 26 This observation was again mainly based on H&M in Yale Shopping Mall. Following table were cut out from Table1. From this table, we could see that on average each person spent more than 300 yuan and each item cost less than 200 yuan. Average spending per person (RMB) 3,300/10 = 330 Average spending per clothes (RMB) 3,300/19 = 173.7 However it was quite common that a coat cost more than 300 yuan. This result was consistent with the listed price. We found that for a normal t-shirt, the price was between 100 yuan to 399 yuan. The most expensive item in the shop was a thick jacket, which cost 699 yuan. It was very interesting that most people wandered in the new arrival area. Although the basic items were on sale and discount heavily, nearly no one wandered in basic items area. The cheapest long underwear cost only 59 yuan, but it appears that nobody cared. Besides, there were few people in male, kids, maternity dress or sports areas, which were placed in the second floor. Each of those products in the second floor cost no more than 300 yuan. The clothes of kids cost no more than 150 yuan. However, more customers in the basic areas of Uniqlo and MUJI, despite the price of basics of MUJI and Uniqlo cost much more—around 300 yuan. b. Findings from Questionnaire Question 12 in the questionnaire asked respondents about the highest price of a normal coat of fast fashion brands they could accept. Most people selected the range between 201 yuan to 400 yuan and 401 yuan to 600 yuan. That meant that if a normal coat cost more than 400 yuan, companies might have difficulty to sell it; if a normal coat cost more than 600, it
  • 28. 27 was highly likely that companies fail to sell it. Question 3 in the questionnaire asked respondents about the average amount per month spending on clothes. Most of the people selected the range from 201yuan to 500 yuan, not very high. This was affected by respondents’ income and had influence on how much was affordable. Since question 2 showed that most of the respondents were between 18 to 24 years old, the results were not surprised. Sub-question 4 of question 8 -- measurement of affordable price -- showed that most people agreed that fast fashion brands had a larger discount percentage than other non-fast fashion brands so that they could afford fast fashion products. But sub-question 3 that the price of fast fashion brands products has more room to rise and they can accept that the price of fast fashion brands goes up told that customer did not think the price of fast fashion products had room to rise; if the price goes up, customers might not choose to buy. Sub-question 2 demonstrated, however, that if the products have other advantages such as a higher product quality or a fancy design, customers could still accept it. 5.2.4 Results and Analysis of Fashionable Design According to our observation of H&M, Uniqlo and MUJI’s stores in Zhuhai, we found that the main products of MUJI were basic products and the style was simple relatively. Uniqlo’s clothing style was better than MUJI, but it also gave priority to casual clothing style. H&M is the most fashionable one and it attracts more young people. During our observation, there were more young people entering into fitting room in H&M than the other two. From H&M’s annual report, it was apparent that H&M adopted “fashion for all” strategy (H&M Annual Report, 2013). It was written that H&M provided a wide range of inspiring
  • 29. 28 fashion, from the latest trends to sustainable classics to wear season after season. H&M’s designers obtained inspiration from films, art exhibitions and magazines, fashion from catwalk to street and trend seminars. Most of people would agree that H&M’s products are fashionable. Different from H&M, MUJI and Uniqlo preferred basic products and pursued simple and environmental design concept. 6. Implication and Recommendation on Fast Fashion Companies’ Performance Based on previous study of consumers’ preference of fast fashion companies’ performance, we got the result that brand, affordable price and quick response had linear relationships with consumers’ preference. Among the three variables, quick response had the greatest linear relationship and affordable price had the least linear relationship. Fashionable design had been tested that it did not have linear relationship with consumers’ preference. In order to compare the quantitative research with fast fashion companies’ actual performance, we deeply studied the performance of the four independent variables which were shown on companies’ annual report or other official websites. Since the first part of the model measured consumers’ preference on the whole fast fashion industry’s performance, the second part of the model focused on several leading brands in fast fashion industry and their difference with the whole industry performance in consumers’ perspective. Using H&M as the main brand, we also referred other brands’ data and situation in the report to better explain the implication.
  • 30. 29 6.1 Quick Response Quick response involves short production and distribution lead time. It reflects company’s ability to quickly produce products that meet customers’ needs and to distribute new arrivals to stores. The figure in financial report showed that quick response had positive influence on fast fashion companies’ performance. Though customers paid little attention on quick response during our research and the frequency of providing new arrivals could satisfy most of customers, quick response was also a significant factor in producing fashionable and various products and improving sales revenues. Fast fashion companies can consider consumers’ expectation but it cannot be the reason to limit the ability of quick response. H&M should persist in adopting quick response strategy since it matches H&M’s market position. With quickly responding to market demand, H&M can provide various kinds of fashionable products to attract customers. However, for MUJI and Uniqlo, whose main products are basic products with better quality, they should adjust distribution lead time and do not give too much component on quick response. The importance of quick response of MUJI and Uniqlo is not as much as that of H&M and Zara, because basic products have simple style and need not always change. 6.2 Brand From customers’ perspective, brand loyalty was shown by customers’ forming a regular habit to buy products of certain brands and thus customers were loyal to those brands (Singh & Pattanayak, 2014). Kozinets et al (2002) believed that expansion could increase market
  • 31. 30 share and encourages customers to interact with the brand. Chinese people tend to go for famous brands, and they like to wear clothes that known by many people. Normally large number of stores in downtown area gain popularity since the stores in downtown is the main source of gaining knowledge about those brands in China. That means that increase presence help improve brand image. Hence they gain purchase experience and finally have chance to regularly purchase. The observation results, annual report and questionnaire data we collected all justified that fast fashion companies in China should build customer loyalty by opening new stores in best place to increase the presence so that to encourage customers to gain knowledge and purchase experience and improve the degree of involvement. In this way can the market share increase and sales increase. 6.3 Affordable Price Affordable price is the price that accepted by consumers and not over-priced. Consumers prefers affordable price when they picking fast fashion products. Companies should care much about price setting since affordable price is one of a main factor that customers consider when they choose brand. From customers’ perspective, fast fashion provides affordable price, and if the companies can charge more without a big influence on sales, there may be some room to rise for the price. Affordable price of fast fashion products attract more customers compared with non-fast fashion products (Choi, 2013). The observation results showed that it is unwise for company to set the price as low as possible.
  • 32. 31 The affordable price allowed the customers to buy more. It means that with the same amount of money, customers can buy more products in fast fashion brands than in other brands. Therefore the price should not be set too high; normally the amount of a normal coat below 600 is safer for company, as the questionnaire told. It is seems that customers take the price of normal clothes between 200 and 400 for granted hence companies would better to try to charge less than 400 yuan if possible. Customers want to use the limited amount of money to try to buy more products, and actually this consumer group, who always want to pursue big brands, do have limited amount of income. However it does not mean that all the items should charge no more than 600. Companies can charge more for products’ other excellent features, and surely this can be accepted by customers. 6.4 Fashionable Design The issue of fashion varies from person to person. Some people prefer casual style and believe it is fashion; some people appreciate sports style and think it is fashion. The opinions of people participated our questionnaires are subjective. However, generally speaking, H&M and Zara’s products are more “fashion”, because they provide more clothing styles and collection, and follow fashion trend. It is also the reason why Zara and H&M take the leading position in fast fashion industry. It is suggested that fast fashion companies should clarify their strategy and position. For the brands with characteristics of various kinds of fashionable products, they should insist creating fashionable products which are accepted by most of people as fashion. For those brans with the characteristics of providing simple basic products with high quality, they do
  • 33. 32 not need to strength the ability of creating fashionable styles and do not need to invest too much on it. 7. Conclusion Fast fashion companies are expanding in China. Though Chinese people do not have a clear concept of fast fashion, they are being influenced by more and more fast fashion brands. In order to reduce the gap, we first researched factors influencing their preference and then the purchase intention. For this part, we mainly conducted the primary research—distributing questionnaires. The result showed that the three independent variables--quick response, brand, affordable price --have linear relationships with the dependent variable customers’ preference except for fashionable design. Fashionable design is still one of an important considerations but it may not significantly affect the customers’ preference. Since companies must operate according to the market and customers, we further studied this issue from operators’ perspective, which means, we converted the factors from customers’ perspective to operators’ perspective. For the second part, both primary and secondary researches were conducted. Some official materials such as annual report and empirical studies including observation and interview were referred and analyzed to obtain and conclude the implication for companies, and those factors influencing customers’ preference indeed had lots of implication for Chinese operators. Fast fashion industry will definitely continue developing in China. As researchers, we believe that this research could provide some insights for operators, and we hope that this research will be further thoroughly studied in future.
  • 34. 33 8. Limitation This research also has limitations as with other researches. There were seven main limitations. First of all, there was a lack of information about China. It attracted little academic attention. The market of fast fashion brands in China had not developed completely and it was more or less a new topic in China. There were limited resources about the operation of these brands in China we could get. For example, we could not find the detailed financial statement of the operators in China. Hence we had to look at the annual report which might include some rough information about China. Second, the brand we mentioned ignored their parent company since not all sub-brands were in China market; however, some of the information of annual reports represented the situation of parents. Third, some official information of some fast fashion brands was presented in the language of their hometown. For example, MUJI, the Japanese brand, always use Japanese to demonstrate their information, so it is hard for us, who know little about Japanese, to understand the content. There were also such problems in H&M and ZARA. Next one is the distribution of questionnaire. Although we used the most authoritative and diversified ways to distribute questionnaire, there was still some invalid questionnaires. For example, although we distributed some questionnaires through public websites, some questionnaires were distributed through our own social websites, which might attract the respondents who had the same attributes.
  • 35. 34 Besides, the design of questionnaire also has limitation. For some respondents who carelessly answered the questionnaire, the design of the questionnaire may already have “guidance” on how to answer. To illustrate, respondents may answer the sorting problem more or less according to how we listed. Sixth, the position of observation and interview was limited. Due to the limited time and other resources, we only chose Zhuhai and Shenzhen, instead of the whole China. Zhuhai has limited number of fast fashion brands. Finally, some factors influenced the measurement of the variables. From customers’ perspective, the independent variables included fashionable design, affordable price and so on, which were so subjective that other factors might have influence on customers such as culture, characteristics and so forth. There were also limited resources for us to convert the factors from customers’ perspective to operators’ perspective.
  • 36. 35 Reference Barnes, L., & Lea-Greenwood, G. (2006),"Fast fashioning the supply chain: shaping the research agenda", Journal of Fashion Marketing and Management: An International Journal, Vol. 10 Iss 3 pp. 259 -271 Barth, M. E., Clement, M. B., Fosthr, G., & Kasznik, R. (1998). Brand Values and Capital Market Valuation. Review Of Accounting Studies, 3(1/2), 41-68. Cachon, G. P., & Swinney, R. (2011). The Value of Fast Fashion: Quick Response, Enhanced Design, and Strategic Consumer Behavior. Management Science, 57(4), 778-795. Caro, F., & Martınez-de-Albéniz, V. (2014). Fast Fashion: Business Model Overview and Research Opportunities. To appear in retail supply chain management: Quantitative models and empirical studies (2nd ed.). New York: Springer. Cheng Yu, S., & Chi Leung, H. (2009). Salespersons' service quality and customer loyalty in fashion chain stores: A study in Hong Kong retail stores. Journal of Fashion Marketing & Management, 13(1), 98-108 Choi, T. M. (Ed.). (2013). Fast fashion systems: Theories and applications. CRC Press. Choi, T. M., Liu, N., Liu, S. C., Mak, J., & To, Y. T. (2010). Fast fashion brand extensions: an empirical study of consumer preferences. Journal of Brand Management, 17(7), 472-487. Ghemawat, P., & Nueno, J. L. (2003). ZARA: Fast Fashion (Multimedia Case). Harvard Business School Cases, 1. http://economists-pick-research.hktdc.com/business-news/article/International-Market-Ne ws/Fast-Fashion-Arrives-In-China/imn/en/1/1X000000/1X07131Q.htm
  • 37. 36 H&M Annual Report 2010 http://about.hm.com/en/About/Investor-Relations/Financial-Reports/Annual-Reports.html H&M Annual Report 2011 http://about.hm.com/en/About/Investor-Relations/Financial-Reports/Annual-Reports.html H&M Annual Report 2012 http://about.hm.com/en/About/Investor-Relations/Financial-Reports/Annual-Reports.html H&M Annual Report 2013 http://about.hm.com/en/About/Investor-Relations/Financial-Reports/Annual-Reports.html H&M Annual Report 2014 http://about.hm.com/en/About/Investor-Relations/Financial-Reports/Annual-Reports.html Inditex Group Annual report 2014 http://www.inditex.com/documents/10279/18789/Inditex_Group_Annual_Report_2013.p df/88b623b8-b6b0-4d38-b45e-45822932ff72 Ke, W. (2010). “Fast fashion” arrives in China. China National Garment Association. .retrieved 6 Nov. 2014 from Kozinets, R. V., Sherry Jr., J. F., DeBerry-Spence, B., Duhachek, A., Nuttavuthisit, K., & Storm, D. (2002). Themed flagship brand stores in new millennium: theory, practice, prospects. Journal Of Retailing, 78(1), 3-4. Mandy Sheridan, M., Metropolitan University, Christopher Moore, M., Metropolitan University, & Karinna Nobbs, M., Metropolitan University. (2006). Fast fashion requires
  • 38. 37 fast marketing. Journal of Fashion Marketing and Management, 10(3), 301-315. doi: http://dx.doi.org/10.1108/13612020610679286 Meichtry, S. 2007. Benetton picks up the fashion pace. The Wall Street Journal. MIZIK, N. (2014). Assessing the Total Financial Performance Impact of Brand Equity with Limited Time-Series Data. Journal Of Marketing Research (JMR), 51(6), 691-706. SG Hayes, M., Metropolitan University, & Nicola Jones, M., Metropolitan University. (2006). Fast fashion: A financial snapshot. Journal of Fashion Marketing and Management, 10(3), 282-300. doi: http://dx.doi.org/10.1108/13612020610679277 Singh, P. K., & Pattanayak, J. K. (2014).The Impact of Brand Loyalty on Consumers' Sportswear Brand Purchase. IUP Journal Of Brand Management, 11(4), 40-52. Thamaraiselvan, N., & Raja, J. (2008). How Do Consumers Evaluate Brand Extensions - Research Findings from India. Journal of Services Research, 8(1), 43-62. Retrieved from http://search.proquest.com/docview/195569732?accountid=38789 The Gap Annual Report 2013 http://www.gapinc.com/content/attachments/gapinc/GPS%202014%20Annual%20Report. pdf Uniqlo Annual Report 2013 http://www.fastretailing.com/eng/ir/financial/
  • 39. 38 Appendices Table 1: Role of each question in the questionnaire. Q1, Q2 Attributes of the respondents: age and gender Q3,Q11,Q12,Q13 Facts about respondents, provides useful data related to independent variables Q4 Respondents’ knowledge of the fast fashion, satisfies one of the objectives Q5 Ranks of fast fashion brands in view of respondents’. Q6 Measurement of dependent variable Q7, Q8, Q9, Q10 Measurement of independent variables Q14 Open questions, provides useful data for industry Table 2: Results of observation in H&M shop in Yale Shopping Mall Customer ID 1 2 3 4 5 6 7 8 9 10 Total: 10 Time spent in shop(minutes) More than 35 Less than 15 — Number of clothes purchased 3 1 3 4 2 1 3 2 0 Total: 19 Product range New arrivals — — Total spending(RMB) 600 300 650 500 250 150 500 350 0 0 Total: 3300 Average spending per person(RMB) 3300/10=330 Average spending per clothes(RMB) 3300/19=173.7 Average number of clothes purchased per person 19/10=1.9
  • 40. 39 Chart 1: Frequency of providing new fast fashion products Chart 2: Select specialty apparel retailer revenues in 2000-2012. (Caro and Martınez-de-Albéniz , 2014) Twice or more than twice a week Once a week Once a half of month Once a month Once a season Once a half of year Once a year Less than once a year No new product Consumers Believe 31 90 114 101 50 9 2 1 4 Consumers Hope 39 89 123 98 46 2 2 0 3 31 90 114 101 50 9 2 1 4 39 89 123 98 46 2 2 0 3 0 20 40 60 80 100 120 140 NumberofPeople Frequency of Providing New Fast-fashion Products Consumers Believe Consumers Hope
  • 41. 40 Chart 3: Weekly new arrivals in the Women section in Fall 2013. (Caro and Martınez-de-Albéniz , 2014) Chart 4: Results of sub-question of question 6 in questionnaire: Fast fashion brands have high awareness in China. People around me know some fast fashion brands or have buying experience 0 20 40 60 80 100 120 strongly disagree disagree a little bit disagree neutral a little bit agree agree strongly agree
  • 42. 41 The Survey of the Factors Affecting Chinese Consumers' Preference on Fast Fashion Industry Dear participants: We are conducting this survey to find out customers’ preference on fast fashion products. Thank you for spending time to participate in our survey about fast fashion company. All the data you provide will be only used in statistics analysis and be held confidential. Please read the questionnaire carefully and answer the following questions according to your situation. Thanks for your cooperation. For all the following questions, please use a “√” to select your answers. Basic information: 1) Gender:1. □male 2. □female 2) Age: 1. □18~25 2. □26~32 3. □33~40 4.□Over 40 3) The average amount per month spending on clothes: 1.□Less than or equal to 200RMB 2.□201~500RMB 3.□501~1000RMB 4.□1001~2000RMB 5.□More than 2000RMB 4) Have you ever heard about the term” fast fashion”, or heard about the term’s another name “high street fashion”? To what degree do you know about it? (Fast fashion is a type of fashion business which has quick response production capabilities and enhanced product design capabilities to produce the products that meet the latest trends. Important brands in this industry include ZARA, H&M and so forth.) 1. □Never heard about it 2. □Know a little 3.□Have some knowledge 4. □Know it very well 5) From which of the following brands you are more willing to buy (please permute)? □Zara □H&M □Gap □Uniqlo □MUJI □Benetton □Mango □Others, please specify 6) In general, what is the degree of your preference of fast fashion brands? (please assign percentage) 0(not prefer) ~100% (totally prefer) Based on your knowledge of fast fashion brands, please answer the following questions.
  • 43. 42 (“1”= strongly disagree, “2”= disagree, “3”=neither agree nor disagree, “4”=agree, “5”=strongly agree Part 1 Brands 7) I buy fast fashion products more often than non-fast fashion products. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 8) I am willing to pay close attention to fast fashion brands’ related information, including new products’ information and related advertising information. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 9) I am willing to recommend fast fashion products to other people. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 10) Fast fashion brands have high awareness in China. People around me know some fast fashion brands or have buying experience. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 11) If a fast fashion brand has a little negative evaluation, probably I will not buy it. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ Part 2 Quick Response (shown as new products quickly arrives at stores and products on the showcase are changed frequently even once or twice a week): 12) I can see the new products or updated products on the showcase each time when I arrives the fast fashion stores. I can see new products even once or twice a week. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 13) The speed of changing garments according to seasons is fast, and fast fashion companies can provide the new season products much earlier than other non-fast fashion companies. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 14) Fast fashion companies can always meets my requirements of products quickly. The new fast fashion products are necessary for customers and customers are willing to try them. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□
  • 44. 43 15) The time of hesitating to buy fast fashion products is less than that of buying other products. One of the reasons is that if I do not buy it this time, I will miss the chance to buy it later because fast fashion companies will quickly updates products and it will be replaced by new products. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ Part 3 Affordable Price 16) The price of the fast fashion brands is more reasonable, more acceptable and cheaper than that of other non-fast fashion products. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 17) The price of fast fashion brands products is higher than that of others, but if the products of fast fashion brands have other advantages such as a higher product quality or fancy design, I can still accept it. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 18) The price of fast fashion brands products has more room to rise; I can accept that the price of fast fashion brands goes up. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 19) Fast fashion brands have a larger discount percentage than other non-fast fashion brands, so that I can afford fast fashion products. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ Part 4 Fashionable Design 20) The products of fast fashion brand reflect the current popular trend. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 21) The design of a fast fashion brand has a higher novelty and has its own style. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 22) The products contain elements that can be found in popular media such as magazine or fashion week. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□ 23) The fashionable design receives recognitions from other people. 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.□
  • 45. 44 24) I believe that the time period of providing new products or updating products is: □Twice or more than twice a week □Once a week □Once a half of month □Once a month □Once a season □Once a half of year □Once a year □Less than once a year □No new product 25) I would like the time period of providing new products or updating products to be: □Twice or more than twice a week □Once a week □Once a half of month □Once a month □Once a season □Once a half of year □Once a year □Less than once a year □No new product 26) What is the highest price of a normal coat of fast fashion brands you can accept? □Below or equal to 200RMB □201~400RMB □401~600RMB □601~800RMB □801~1000RMB □1001~1200RMB □Above1200RMB 27). Which of the following factors also has influence on your purchase of fast fashion brands products?(you may choose more than one options) □High product quality □Diversity of products □Convenient store structure,easy to choose cloths and to go for fittings, for example □High quality service from shop assistant, such as timely proper shop guidance □Other factors(please fill in the blank)________
  • 46. 45 关于快时尚品牌的调查问卷 您好!感谢您在百忙之中抽出时间参加我们小组关于快时尚品牌的调查,我们调查的目的是了解消 费者对快时尚品牌的了解程度及偏好程度。您所提供的资料将只用于统计分析。请您认真阅读并根 据自身情况回答下列问题,谢谢合作! 基本信息: 1) 性别:1. □男 2. □女 2) 年龄:1. □18~25 岁 2. □26~32 岁 3. □33~40 岁 4. □40 岁以上 3) 每月平均服装花销: 1.□200 元及以下 2.□201~500 元 3.□501~1000 元 4.□1001~2000 元 5.□2000 元以上 4) 您听说过快时尚吗?对快时尚的了解程度是: 1. □完全没听说过 2. □了解很少 3. □了解一些 4. □非常了解 (快时尚产品始终追随当季潮流,新品的到店速度奇快,橱窗陈列的变换频率很高。快时尚以快、 狠、准为主要特征,带动了全球的时尚潮流。) 5) 您更愿意去哪个快时尚品牌商店买衣服,请给它们排序 (请在前面标上序号): □Zara □H&M □Gap □Uniqlo (优衣库) □MUJI(无印良品) □Benetton □Mango □其他,请写出 6)总体来说,您对快时尚产品的偏好程度所占的百分比是 (0%不满意~100%非常 满意) 请您根据自己对快时尚品牌的了解,回答下列问题。(“1”表示强烈不同意,“2”表示不同意,“3”表示 有点不同意,“4”表示一般,“5”表示有点同意,“6”表示同意,“7”表示强烈同意) Part 1 品牌 7).相比起非快时尚品牌,我更经常买快时尚品牌的衣服 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 8).我很愿意关注快时尚品牌的相关信息,包括新产品信 息及相关广告信息等 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 9).我乐意向其他人推荐快时尚品牌的产品 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □
  • 47. 46 10).快时尚品牌在中国有很高的知名度,身边很多人知道 或有购买经历 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 11).倘若该品牌有少许负面评价,我很可能还是会选择它 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ Part 2 对市场的快速响应(Quick response)(表现为新品到店速度快,橱窗陈列更换频率高,可 高到一周一次或两次等) 12).每次到店我都能看到有新产品上架或橱窗里更换新 产品,甚至每周或连续两周都能看到 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 13).快时尚品牌产品换季速度快,在季节更替前便能提供 下一季节的产品 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 14).快时尚品牌总能快速满足我对产品的需求,都是我需 要及愿意尝试的 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 15).对于决定是否选择购买该产品的迟疑时间比购买其 他产品时间少,其中一个原因是产品更新快、产品很快 被新产品取代因此可能会有错失购买机会 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ Part 3 价格可接受性 16).快时尚品牌的价格比其他非快时尚品牌的价格更公 道,更能让人接受 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 17).如果快时尚产品价格很高,但是有其他优势比如质量 好或设计独特,我也可以接受 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 18).快时尚品牌价格比其他品牌价格更有上升空间,或我 能接受该产品价格有小幅上涨 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 19).快时尚产品打折幅度大,以至于我有能力并愿意购买 很多产品 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ Part 4 时尚的设计 20).快时尚品牌产品能够反映当下的流行趋势 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7.
  • 48. 47 □ 21).快时尚品牌产品的设计时尚新颖,有自己的时尚风格 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 22).快时尚品牌产品能体现在时尚媒体(杂志、时装周等) 上流行的时尚元素 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 23).购买过的快时尚品牌的服装设计受到周围人的认可。 1.□ 2.□ 3.□ 4.□ 5.□ 6.□ 7. □ 24).您认为快时尚品牌的新产品上架或更换产品的时间 周期一般为多久 □一周两次及以上 □一周一次 □半个月一次 □一个月一次 □一季度一次 □半年一次 □一年一次 □少于一年一次 □没有新产品上架 25).您希望新产品的到货周期或者产品的更换周期为 □一周两次及以上 □一周一次 □半个月一次 □一个月一次 □一季度一次 □半年一次 □一年一次 □少于一年一次 □没有新产品上架 26).您能接受的快时尚产品的最高价格为(以一件普通 外套为例) □1200 以上 □1001~1200 □ 801~1000 □601~800 元 □401~600 元 □201~400 元 □200 元以下 27).您认为下列哪些因素也影响您购买快时尚品牌产品(可多选): □产品质量好 □产品多样化:产品品种、种类繁多 □门店结构方便,如便于挑选和试衣 □店员为顾客提供优质的服务,如导购、交款方便等 □其他(请您补充)__________