Europe Vs US : fashion wars

Brands which fashion people get excited about are not the brands which ultimate consumers get excited about.

Fashion brands from Europe and US are at war when it comes to attracting their customers online, in China, Brazil, Russia and a few other emerging markets. A survey take by The Digital Luxury Group, states that European brands do abetter business in attracting customers online and in the emerging BRIC markets. American brands are lagging behind when it comes to emerging markets.

US Fashion industry:

US fashion apparel industry is one of the biggest markets in the world with 28% share. Most of the biggest apparel companies are American based, but there is still space for foreign companies. Large metropolitan areas offer good potential for fashion markets, with customers not necessarily Americans. Multi brand retailers have good market entry. US fashion market hold numerous brands, and the industry is fragmented. Among the top 40 companies in the US, a few of them are foreign brands. Uniqlo, Zara, Lululemon Athletica are the brands which entered the US market recently.

European brands have been dominating the fast fashion segment, and are predicted to have a high growth potential. Comparatively American companies have a different structure than their foreign counterparts, by preventing fast adaption to changes on the market, and consequently keeping market shares as the fast fashion companies employ their strategies. Much of the companies dominating the US market are low to medium cost and almost none in the luxury segment. US market has a wide brand portfolio that protects the market share and increases the competitive advantage of the brands.

Getting most out of their merchandise is the expectation of 93% of the US consumers. They favor some retailers over the others, and give high importance to both price and quality. Graduate shoppers prefer buying limited items with quality, while others prefer buying more numbers. Consumers from big metropolitan areas have higher spending capacity, and are more interested in fashion.

European Fashion Industry:

Luxury market is Europe has successfully adapted its business model; retailers apply the strategy of fast fashion. Fashion designers overcome the growth barriers by co-operating with the manufacturers, and clients. Most of the fashion industries in Europe follow corporate social responsibility and generate sustainable growth. Europes fashion industry generates 5 million jobs, contributing to 3% of the GDP.

Comparison- US vs. European brands:

Regarding US fashion brands, only 7.5% of global searches are from BRIC countries. 69.8% are from the US itself, and 20.7% are from Europe. On the contrary, 30.5% of the searches for European brands are from BRIC countries, 24.7% are from Europe, and 41.5% are from the US. European brands such as Chanel, Dior, Louis Vuitton, Hermes, and Gucci, had the most 24.5% share from their home regions. This can be compared with the 30.5% share of the BRIC countries, and 41.5% in the US, and 3.5% in Japan.

China remains as one of the primary luxury market at a global level. For fashion brands established or exploring their market in China, recent survey results indicate that sales are slowing down. Chinese market is going through a rapid transformation, and to be successful in the fast changing China, brands require refocusing their attention on China.

There are conventional cultural differences between EU and US. European brands have, and are faring much better than their US counterparts. While Europe is closely associated with high fashion, preppy, casual wear are favored by American brands.

References:

1. The US apparel and fashion industry what its like and how to enter it Swedish Trade Council USA,September,2012.

2. Blogs.ft.com

3. Businessoffashion.com