After China, Zara Expands Live Shopping Experiment to Europe, US

Shoppers walk past a Zara clothes store, part of the Spanish group Inditex, in Las Palmas de Gran Canaria, Spain, December 13, 2022. (Reuters)
Shoppers walk past a Zara clothes store, part of the Spanish group Inditex, in Las Palmas de Gran Canaria, Spain, December 13, 2022. (Reuters)
TT

After China, Zara Expands Live Shopping Experiment to Europe, US

Shoppers walk past a Zara clothes store, part of the Spanish group Inditex, in Las Palmas de Gran Canaria, Spain, December 13, 2022. (Reuters)
Shoppers walk past a Zara clothes store, part of the Spanish group Inditex, in Las Palmas de Gran Canaria, Spain, December 13, 2022. (Reuters)

Zara will expand its live shopping broadcasts to the UK, Europe and the United States this year, testing a format that is already wildly popular in China but one with which Western shoppers are less familiar.

The fast-fashion brand, whose parent Inditex reports quarterly results on Wednesday, is investing in new ways to engage shoppers as analysts expect sales to grow less strongly after an extraordinary post-pandemic surge.

Five-hour long live shopping shows in China, broadcast weekly on Douyin, TikTok's Chinese sister site, have helped boost Zara's sales since they launched in November, according to retail analytics firm EDITED, Reuters reported.

"We want to take this to the Western countries, where livestream is not as popular...but we think why not – from an entertainment perspective this is like an evolution," said a Zara spokesperson for the initiative, which is expected to launch between August and October.

Shopping as entertainment isn't new - TV shopping channels where viewers phoned in to buy featured products were popular for decades - but social media and ecommerce have triggered a new era of livestreaming, led by China where influencers sell everything from cosmetics to snacks at a frenetic pace.

Brands looking to create a more rarified experience have sought to do live shopping differently.

Zara's show on Douyin features Chinese models wearing Zara dresses, trying on shoes and jewellery. It also includes catwalk sequences and "backstage" make-up shots, while its conversational, leisurely style is in contrast to the hard-sell livestreams that hosts like "Lipstick King" Li Jiaqi are famous for.

A team of 70 people works on the live show, which is streamed from a 1,000-square metre space in Shanghai, switching angles between seven cameras, Zara said. On average, it attracts around 800,000 unique viewers per show.

"Zara's livestream approach built significant brand awareness in China," EDITED analyst Krista Corrigan said.

Zara sold out of most sizes in 50% more products in China in the first three months of this year than in the same period of 2023, according to EDITED data.

The livestream also allows Zara to reach shoppers even as its physical presence in China has shrunk from 570 stores in 2019 to just 192 as of Jan. 31 this year.



Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
TT

Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)

Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9 billion), an 11% drop on an organic basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9% drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30%, following a 42% drop in the first half.

Sales at Gucci fell 19%, showing no improvement from the first quarter, and below analyst expectations for a 16% decline, according to a Visible Alpha consensus.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

Kering chief financial officer Armelle Poulou told reporters that the designs had been well received and the rollout was on track.

But the efforts have been complicated by a downturn in the global luxury market, while China's rebound - traditionally Gucci's most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

Earnings from sector bellwether LVMH on Tuesday missed expectations as sales rose 1%, offering few signs that a pickup is around the corner, sending shares in luxury goods companies down on Wednesday. Kering traded at its lowest level since 2017.