4 Zara
4 Zara
Group 9 10/10/2024
Zara SS 2021
MARKETING CHANNELS
Channel Decisions Zara Fashion International Marketing
CONTENT
International Marketing
About Zara 01
Distribution Channels 03
ABOUT ZARA
Q1. Introduction of the company and its
international activities.
0101
ABOUT ZARA
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
ABOUT ZARA
Vision
To contribute to the sustainable
development of society and that of the
environment with which we interact
96
Countries
Americas
301 stores
Asia
399 stores
Africa
30 stores
1,811
Outlets
Oceania
18 stores
INTERNATIONAL
About Zara
PRESENCE
Source: Inditex Group (2023)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
PRODUCT PORTFOLIO
Footwear
Clothing
Beauty Perfume
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
VALUE
PROPOSITION
VALUE CHAIN
ANALYSIS
Q2. Sketch the supply chain for the company from raw
materials to end-user purchase
Q6. How does the company add value for the customer
through major logistic functions?
02
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
VALUE CHAIN
Raw Material Fashion
Suppliers
Bulk
Fabric
Garment Design
Sketches Designers Vertically Integrated
Business Model
Bulk Fabric Design Reviews
Orders Zara Global & Sales Performance
Q2.
Source: Monu Jangid (2022)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
VALUE CHAIN
The Cube
Q2.
Source: SCM Globe (2020)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Distribution Center
Finished " The Cube" Finished
Production rate agility,
Garments Garments
reducing inventory needs
Garment
Store Clothing
Managers
Orders
Garment Orders,
Cut Fabric Factories
Smaller production runs
accurate market responses
Q2.
Source: Monu Jangid (2022)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q2.
Source: SCM Globe (2020)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
VALUE CHAIN
Technology integration for high-speed production, inventory managment and distribution managment;
SECONDARY ACTIVITIES
Infrastructure comprehensive & effective leadership structure, market analysis & management responsibility
MARG
Emphasizes HR with dedicated directors, at least a week of training, encourages trend awareness through
HR fashion shows, and prioritizes motivation and satisfaction via store managers
Smooth data flow between store managers and headquarters, significant IT investments, including PDA software
Technology for real-time sales and distribution updates
IN
Raw materials sourced regionally, purchases low-cost inputs, and owns Spanish factories to locally and quickly
Procurement transform materials into products
IN
Raw Material Centralized design Seasonal distribution Minimal ad spending Customer satisfaction
MARG
Management and procurement with fashion seasons Agility thanks to in- emphasis
Supply Chain Control Several different Data-driven forecast house manufacturing Youth-centric
Flexible Manufacturing business lines based on sales data Short sales cycle approach
Q2.
Autonomous 24-40 hour delivery to Franchising & joint Quickly responsive to
department & agile expedite product ventures in culturally feedback
market response availability sensitive regions
CUSTOMER
Increasing focus on sustainable logistics practices,
appeals to environmentally conscious consumers
Q6.
ADDED VALUE
Source: CBI Insight (2018)
ZARA
VALUE CHAIN
ANALYSIS
Q3. Factors the company needs to consider designing its
marketing channel for a product
Q4. Discuss the complexities the company faces designing
channels in other countries
Q5. Discuss the concepts of horizontal and vertical conflicts
03
as they relate to the company
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
PRODUCT OF CHOICE
Clothing
Core Business Fast Fashion Brand Identity
The primary product Essential of the brand’s Closely tied to customer
category of the brand business model perception of the brand
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Gender
Female
Age
18 - 40
Income
Middle
1. CUSTOMER
WHO
are they?
Source: Siying Liu et al. (2024)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Psychographic
Fashion
Enthusiast
Zara offers high-fashion-
inspired items, appealing
to people with updated
fashion knowledge and
express personal image
1. CUSTOMER
through stylish clothing
WHO
are they?
Source: Siying Liu et al. (2024)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Psychographic
Trend
Seekers
Zara can turn runway
designs into stocked
items in a short time,
helping trend-seeking
customers promptly keep
1. CUSTOMER
up with the latest trends
WHO
are they?
Source: Siying Liu et al. (2024)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Psychographic
Value-
oriented
Zara offers fashionable
items at mid-range
prices, much lower than
luxury brands without
losing quality, attracting
1. CUSTOMER
customers who prioritize
WHO quality-price balance
are they?
Source: Siying Liu et al. (2024)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Frequency
1 - 2 times
per month
Shopper frequency at
Zara is 2x to 3x higher
1. CUSTOMER
than traditional women’s
WHEN apparel, which indicates
super brand loyalty
do they buy?
Source: Forbes (2021)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Retail Online
Outlets Platforms
Usually located in high- Including livestreams,
traffic, high-end areas, social media channels,
mainly in Tier 1 cities Zara’s own website &
(New York, London, Tokyo, mobile app, and other
Beijing, Rome, Madrid ...) e-commerce platforms
1. CUSTOMER
WHERE Source: SuccessStory (2024) Source: Brand Equity (2024)
do they buy?
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Inform Purchase
Through livestreams, influencer
promotions & seeding mechanism
In Person
Willing to buy in person at
centralized locations for CXP
Online Purchase
Increasingly purchase online via
livestreams, e-commerce, ...
After-sales Services
1. CUSTOMER
HOW
Returns, consultant, customer
support and delivery
do they buy?
Source: Dao Insights (2023); Amplify (2022)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Behavior
Impulse
Buyer
Zara’s fast-changing
collections, limited stock
and frequent release of new
products create a sense of
urgency and encourages
1. CUSTOMER
“see now-buy now" behavior
HOW
do they buy?
Source: Impaakt (2021)
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q3. Decision 1
CUSTOMER
NEEDS Channel Channel
Offline Online
Sustainability of Affordable, convenient
production & distribution stay-at-home purchases
Innovative in-store Easy returns, efficient
shopping experiences service & fast delivery
1. CUSTOMER
WHAT Source: Mintel (2024); Dao Insights (2023) Source: Focus (2023)
do they want?
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
COMPANY NATURE
Criterias ZARA How it affects Channel Objectives
Production Volume/ Large scale Prioritize a highly responsive and scalable distribution network to ensure
Business Size manufacturer its fast-fashion model works
2. COMPANY
Reputation of the
Strong reputation Prioritize channels that can effectively showcase the brand
Company
COMPANY PRODUCT
Criterias ZARA Products How it affects Channel Objectives
Not Durable Zara’s focus on a streamlined supply chain and omnichannel strategy
Perishability
(Perishable) supports rapid restocking to match ever-changing fashion trends.
2. COMPANY
Tangible vs Zara uses efficient logistics centers, omnichannel services, and ship-
Tangible
Intangible Products from-store capabilities, which are suitable for its products like clothing
COMPANY PRODUCT
2. COMPANY
Omnichannel Strategy
Q3. Decision 2
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
COMPETITORS
Headquarter
(Sweden)
buyers_designers_pattern
Production Offices
(20 countries)
Work directly on a global product management_auditors_
merchandizers_buyers
scale with intermediaries
Focus expansion on
omni-channel growth;
facilitating a seamless,
3. COMPETITOR
holistic customer journey
Source: H&M Group; H&M International Sales Source: MacCarthy et al. (2022)
Q3. Decision 2
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
COMPETITORS
3. COMPETITOR
partners & community
Source: Fast Retailing (2023) Source: Fast Retailing (2023) Source: Changellenge (2015)
Q3. Decision 2
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
COMPETITORS
Shorter
Channels
3. COMPETITOR
Longer
Channels
Q3. Decision 2
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
COMPETITORS
Shorter
Channels
3. COMPETITOR
Both competitors push Zara
to remain competitive while
Longer keeping up innovation and
Channels process streamlining
Q3. Decision 2
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
CHANNEL
OBJECTIVE
Providing trendy clothing with the
FASTEST
TIME TO
MARKET
Q3. Decision 2
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
DISTRIBUTION
#vertically_integrated
#fast #flexible #efficient
Q3. Decision 3
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
CHANNEL CHOICE
Vertically integrated distribution helps reduce intermediary costs
COST High infrastructure investment on logistic & technology
High costs for digitalization & physical stores maintainance
CHANNEL CHOICE
Extensive coverage & strong presence in Tier 1 cities
COVERAGE Low rural penetration due to price sensitiveness & less fashion focuse
Partnership and online activities helps broaden coverage
CHANNEL CHOICE
Vertical
Control Continuity Character
Integration
Cost & Capital alignment
Short Channels Agility
Allocation Channel
Supply Chain Resilience effectiveness
Responsiveness
Ownership
Q3. Decision 3
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
CHANNEL ALTERNATIVES
Criteria Zara's retail stores Zara's franchise stores Online retail stores
2. COMPANY
Strong, but dependent on High
Profitability Moderate to high
physical store success. (Lower overhead)
CHANNEL ALTERNATIVES
Criteria Zara's retail stores Zara's franchise stores Online retail stores
2. COMPANY
Brand Visibility Brand Visibility Wide Reach
Best for
Wide Reach Customer Experience Market Penetration
Zara's commitment to catering to diverse markets is reflected in its localized product offerings
Geopolitical Risk
Potential instability in supply chain and territories
hinders the transportation of goods, especially on key
routes, which limit access and/or erode margins
ZARA INCHINA
CASE STUDY
Q7. Select 1 - 2 countries, assess the company distribution
channel in different countries
03
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
ZARA IN CHINA
Q7.
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
Q7.
E-COMMERCE
Q7.
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
E-COMMERCE Q7.
TMall
(Alibaba)
CNY $138.3M
Gross Merchandise Volume
TMall is one of the largest B2C
e-commerce platforms in China
About Zara Value Chain Analysis Distribution Channels Case Study: China
ZARA
E-COMMERCE Q7.
ZARA IN CHINA
Q7.
REFERENCES ZARA
REFERENCES
13. .
14. . ZARA
15. .
16. .
17. .
18. .
19. Is fast fashion fast enough to keep up with consumers? | Mintel. Mintel. https://www.mintel.com/insights/consumer-research/is-fast-fashion-fast-enough-to-keep-up-
with-consumers/
20. Lokare N. Factors affecting choice of distribution channel. Economics Discussion. Published January 22, 2023. https://www.economicsdiscussion.net/distribution-
channels/factors-affecting-choice-of-distribution-channel/31503
21. H & M International Sales – Global Distribution. https://hm-intl.net/
22. H&M Group. Markets and expansion - H&M Group. H&M Group. Published September 30, 2024. https://hmgroup.com/about-us/markets-and-expansion/
23. MacCarthy B, Ahmed W. Mapping the supply chain: why, what and how? International Journal of Production Economics. doi:10.1016/j.ijpe.2022.108688
24. UNIQLO Business Model | FAST RETAILING CO., LTD. 株式会社ファーストリテイリング ©2024 FAST RETAILING CO., LTD.
https://www.fastretailing.com/eng/group/strategy/uniqlobusiness.html
25. Md Afzalul Aftab, Yuanjian Q, Barua Z, Kabir N. Super Responsive Supply Chain: The Case of Spanish Fast Fashion Retailer Inditex-Zara. International Journal of Business
and Management. Vol. 13(ISSN 1833-3850). doi:10.5539/ijbm.v13n5p212
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https://daxueconsulting.com/clothes-distribution-in-china/
28. Zara’s Marketing Strategy: A Deep Dive into Fast Fashion Dominance | Brand Vision. https://www.brandvm.com/post/zaras-marketing-news
29. China e-commerce market size | Mordor Intelligence. https://www.mordorintelligence.com/industry-reports/china-ecommerce-market
30. Utley E. Tmall focuses resources on brand growth in management update. Alizila. Published May 7, 2024. https://www.alizila.com/tmall-taobao-focus-resources-brand-
growth-management-update-2024/
31. Bloomberg, Bloomberg. Zara to open store on Tmall to boost growth in China. South China Morning Post.
https://www.scmp.com/business/companies/article/1608495/zara-open-store-tmall-boost-growth-china. Published October 2, 2014.
32. Statista. Monthly active users of Douyin in China 2022-2024. Statista. Published June 13, 2024. https://www.statista.com/statistics/1361354/china-monthly-active-users-
of-douyin-chinese-tiktok/
33. Law J. What luxury brands can learn from Zara’s new China livestream concept. Jing Daily. https://jingdaily.com/posts/zara-china-new-concept-livestream-douyin.
Published July 25, 2024.
34. Helen Reid, Corina Pons. After China, Zara expands live shopping experiment to Europe and US. Reuters. Published June 3, 2024.
https://www.reuters.com/business/retail-consumer/after-china-zara-expands-live-shopping-experiment-europe-us-2024-06-03/
Presented By: Tuesday,
Group 9 15/02/2023