Asia-Pacific consumers see Zara as a luxury brand

CATEGORY ANALYSIS: APPAREL

The Spanish fast-fashion label Zara ranked ninth in this year’s luxury goods category in the Asia’s Top 1000 Brands 2019 ranking, below the usual lineup of fashion houses such as Louis Vuitton (which came top again). The ranking usually shows little change, but Zara’s unexpected entry this year just below Burberry displaced Versace, which slid to 14.

The brand also came second after Chanel in the women’s apparel category, which Uniqlo topped last year but this year sits in fourth place.

The likes of Uniqlo and H&M are more familiar competitors to Inditex-owned Zara, and it is ahead of them both in the overall Top 1000 ranking. It moved up to 48 from 52 as Uniqlo fell from 38 to 69. H&M gained slightly, from 65 to 62. While Zara is admittedly higher priced than its closest rivals, it clearly isn’t in the same league as genuine luxury players.

That might not matter to a lot of emerging middle-class consumers, who appreciate good design but have relatively little experience of it. Zara’s aesthetic and retail strategy mean it feels upmarket relative to Uniqlo which, while its clothing might be more wearable, is unlikely to be confused with the likes of Armani.

The perception clearly bodes well for Zara, which is especially well received in India and Vietnam, according to the ranking. But given the speed at which consumer sensibilities have matured in markets like China, it may not last.

The ranking comes at a time of change for the luxury sector, which is increasingly influenced by streetwear and sneaker culture. These are of course quite distinct from Zara’s offering, but Uniqlo continues to innovate through tie-ups with designers and artists associated with street culture. In early June, strong demand for KAWS collaboration T-shirts led to large-scale in-store brawling between Chinese consumers.

Other brands in this year’s top 10 luxury goods ranking were Chanel, Gucci, Hermes, Calvin Klein, Prada and Cartier.

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