Analysis on the Operating Condition of the Foreign Fast Fashion Company in China

Abstract

Brands in the fast fashion industry often have a good development when they just enter China, but this development does not last for a long time. This paper will analyze financial statements and use PESTEL model to study the reasons why fast fashion brands cannot achieve long-term development in China, taking ZARA (owned by Inditex) as an example. In addition to references, the data graph of the study is mainly from Inditex's 2019 annual report and information published in the industry. Through the analysis, conclusions are made here. The macroeconomic environment in China is generally favorable for Zara's growth. Zara plans to close some stores in the future and switch to online sales, so in a country like China where online shopping is popular, this strategy makes sense. Besides, more and more people and institutions begin to pay attention to the issue of sustainable development. Therefore, if ZARA can improve the quality to a certain extent to promote the sustainability of its products in the future, it is also a strategy conducive to long-term development. Both the analysis of the financial position of a company and general environment in a certain country for the industry is important for its improvement strategy.