The owner of Zara, Inditex, a fast fashion company globally, is expanding its low-cost brand Lefties to compete with Chinese-founded rival Shein.
Shein’s rapid growth, as an online marketplace with no physical stores, has created challenges for traditional retailers like Inditex and H&M due to its competitive budget prices.
While Zara has faced pressure on pricing, particularly with a shift towards more upmarket customers, it is quietly expanding its budget-friendly ranges, with Lefties playing a crucial role in this strategy.
Originally an outlet for Zara’s excess inventory, Lefties now operates in 17 countries, including Egypt, Mexico, Romania, Saudi Arabia, Turkey and the United Arab Emirates. Inditex aims to establish a presence in the value segment of the market, responding to consumer demand for affordable options and Shein’s influence.
Lefties has seen growth in Spain and Portugal, catering to consumers who are cost-conscious amid Shein’s aggressive pricing.
In Spain, Lefties has expanded from approximately 3.5 million customers in 2019 to 5 million customers in 2023, positioning it closely behind Shein with an estimated 5.2 million customers.
Lefties’ strategy mirrors Shein’s approach on social media platforms like Instagram and TikTok, engaging with micro-influencers.
The brand is keeping its financial results private, bundled under Zara in Inditex’s reports, and remains focused on providing a strong online service.
Inditex’s management is actively addressing the challenges posed by Shein, acknowledging the importance of competing effectively in the fast-fashion market.
Lefties’ expansion, especially in emerging markets, serves as a strategy to cater to customers who may be less inclined to spend at Zara’s higher price points.
Shein, being the world’s largest fast-fashion retailer with an estimated 18 per cent market share, has prompted Inditex to explore avenues to stay competitive.
While Shein continues to grow in Spain, with 5.2 million shoppers in 2023, Inditex’s Lefties offers advantages such as home delivery, differentiating itself from rivals like Primark and Shein.
The discreet performance of Lefties is seen as a tactical move by Inditex, allowing the brand to reach critical mass and profitability while keeping competitors unaware of its progress.
Last year, Lefties expanded into Romania and Turkey and added stores in the United Arab Emirates, even as other Inditex brands reduced their global store count.
Overall, Inditex had 585 fewer stores by 31 October 2023, compared to the previous year.
