Header photo source: Urban Revivo via Jing Daily.
Urban Revivo, a Chinese fast fashion retailer that has outgrown global brands like Zara and H&M in its home market, now aims to bring the competition to its rivals’ international turf.
The chain, which operates about 420 outlets in mainland China, has opened about ten stores abroad, mainly in Southeast Asia. It is now setting its sights on global fashion capitals like New York and London, said Leo Li, founding chairman and CEO of Fashion Momentum Group (FMG), the parent company of Urban Revivo.
“My grand vision is to build a brand with a scale of over RMB 100 billion (USD 13.75 billion) in sales,” Li said in an interview at the company’s headquarters in Guangzhou. “I want to go overseas early and push our products to be more international.”
Starting in 2025, FMG plans to open more than 20 Urban Revivo stores a year overseas and increase the pace to 50 in the longer term, Li said. After building brand recognition with physical locations, it also aims to increase Urban Revivo’s online sales.
Eventually, the group expects total overseas sales to exceed those in China. The company’s revenue reached RMB 6 billion (USD 824.6 million) in 2022, according to Li, who added that it experienced “good growth” in 2023 and into this year but did not provide specific figures.
A spokesperson said there is still uncertainty over how quickly the group can open more stores because some markets have complex approval processes.
Reports have said that FMG is seeking to raise at least USD 100 million through an IPO in Hong Kong. Li confirmed the company is “in the process of planning” for an IPO, but said it has not specified a timeline. It counts venture capital firms like Hongshan, formerly Sequoia Capital China, among its investors.
A growing number of Chinese consumer companies are seeking foreign footholds due to sluggish consumer demand at home. But FMG stands apart from the likes of online fashion retailer Shein and e-commerce app Temu, which have made splashes overseas by offering cheap items shipped directly from factories in China.
FMG generates more than 70% of its sales from physical stores, many of which have more than 1,000 square meters of floor space and are located in prime commercial areas. Li said shoppers spend an average of RMB 500–600 (USD 68.75–82.5) in its shops, more than some competitors.
Mark Tanner, managing director of Shanghai-based marketing company China Skinny, said a common thread among Chinese brands succeeding in other markets, particularly in the west, is that “you get a lot of bang for your buck.”
Tanner said, “Urban Revivo is charting new territory in going for that higher-end segment of the market.”
While China’s domestic fashion market is enormous as a whole, Li said a challenge for retailers is that consumers in first-tier cities like Beijing and Shanghai have vastly different preferences from those in lower tier municipalities. FMG is betting that gaining brand recognition overseas will further increase its appeal in the fast fashion category at home.
“If you are accepted in the UK, the US, in Europe, I firmly believe that China’s fashion-conscious consumers will also like us, which can extend the life cycle of the enterprise,” Li said.
Urban Revivo stores are designed to wow shoppers, mainly young women, with music, art, large mirrors, and VIP fitting rooms. The chain also employs digital technology: At a store in Guangzhou, shoppers can scan a shirt at a display panel, browse through images of how it can be paired with different pants, and tap the screen to have one delivered to the fitting room.
The obsession with physical stores may appear counterintuitive in China, where 62% of consumers bought clothes online in 2022, according to research specialist iiMedia. But Li said that achieving scale through e-commerce is challenging in China, where brands do not mainly sell through their own websites but by setting up virtual stores on platforms like Taobao, Douyin, and JD.com.
“For excellent brands, their offline proportion is still higher than online,” he said.
Li has worked in the apparel industry since the late 1990s and discovered Zara in 2003 during a trip to Tokyo. Struck by the fashionable yet inexpensive products, he sought to become a franchisee of Zara in China, but the company said it was not looking for one. He decided to launch Urban Revivo, the first fast fashion brand in China, in 2006. That same year, Zara opened its first store in the country.
Urban Revivo has been adding about 50 stores annually in recent years and its physical footprint now tops some of its global peers. Zara had 96 outlets in China as of January. H&M does not disclose its store count in the country, but an executive told local media in May that it had about 300 in the Greater China region at the end of its 2023 fiscal year. Gap sold its China business to Baozun, a local e-commerce service provider, in early 2023. Baozun later said 86 stores were closed before the takeover, equivalent to a 40% year-over-year decline.
“Unlike global giants like H&M and Zara, which are cutting back on physical stores and leaning more into e-commerce, Urban Revivo is doubling down on its domestic footprint,” said Antonello Germano, a marketing analyst at Daxue Consulting. “Moreover, Chinese consumers perceive Urban Revivo as more in tune with local trends and resonating deeply with Asian Gen Z tastes.”
Uniqlo, the Japanese casual clothing chain, had a larger presence of 926 stores in China as of June.
In 2022, FMG launched a second brand called Benlai that is focused on comfort and basic design. It operates about 15 Benlai stores in China and plans to open 30–50 new outlets next year.
Li said unlike previous generations, young Chinese consumers no longer buy clothes just because they are from a foreign brand. One of the keys to Urban Revivo’s success, he said, was localizing design to match the tastes of Chinese consumers.
He acknowledged that FMG could face the same challenge as it explores overseas markets. While most of the supply chain will remain in China over the short term, the company has set up a design team in London to make clothes tailored to the Western market.
Still, analysts see an uphill battle ahead.
“Offline fashion brands haven’t been as successful as Shein and Temu in growing overseas,” said Germano of Daxue Consulting. “Purely e-commerce players like Shein can outpace competitors with low prices and rapid product launches, advantages that are harder to replicate with brick-and-mortar stores.”