Thank you to all who responded to my poll, and also kindly answered my questions on your shopping habits.
As promised, I am sharing the results of my poll across Facebook, Instagram and LinkedIn.
Key takeaways:
Uniqlo is by far the clear winner, followed by Zara, H&M and lastly, the Padini brands.
This is a survey that is not representative of the Malaysian population as the demographics are mainly professionals between the ages of 20-30.
Zalora and its ilk i.e. the Internet startups would keep me up at night if I were to invest in Padini.
Pulling together the various comments from the respondents, I was left with the feeling that the online startups are the new "fast fashion", offering the best value for money and immense convenience. It is now, in my opinion, a race to the bottom with Uniqlo, Zara and H&M offering discounts that make the price points comparable with Padini, but at better quality. Padini has been slow to adapt to the times or even make use of its longstanding presence in Malaysia (e.g. collabs with local influencers; even Uniqlo has a hijab collab!!!).
The Amazon effect
Zalora offers some great discounts and you are free to return your purchases at any MyNews. The return process is astoundingly simple and painless: it comes with a resealable bag which you drop off at the ubiquitous MyNews. Your bedroom is now your changing room. Why bother braving the stress of traffic and parking to buy some clothes? The clothes now come to you!
In my opinion, this solves one of the concerns consumer faced when buying online i.e that they would prefer to try it on first rather than buy something they would not wear.
(Dis)count me out
In my opinion, this then piles pressure on the various brick-and-mortar clothes retailers to lure shoppers back to their shops, which can only mean one thing: discounts. It is now a race to the bottom and the profit pool shrinks.
Too little, too late?
Padini is making some effort online but its socmed pages and website look like they need more work to defend against the online onslaught. Zalora has 400k followers in IG, UniqloMY 284k and Padini 270k. (Notably, none of my IG buddies follow Padini, indicating once again my survey is not representative. I probably need to go interview some Padini customers.) Padini's website feels clunky compared to Oxwhite's.
Online and offline onslaught
Clothing has always been a competitive industry, and Padini has triumphed in recent years. I am just struggling to see how it will wiggle out of this one: an environment where both the online and offline retailers are fighting it out in a red ocean.
I will lump Padini in the "too hard"/"potential sleepless nights" basket. Given the current share price, Mr Market is probably right on this one.
Padini post: https://valuendiscipline.wixsite.com/edumalaysia/post/investment-idea-4-padini-holdings-berhad
P.S. Need some equity investing/ valuation coaching? I can be yours. Check out my previous post here: https://valuendiscipline.wixsite.com/edumalaysia/post/valueformoneyadvice
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