Inditex, the parent company of Zara, is strategically expanding its budget-friendly brand, Lefties, in response to the rising influence of Shein, a Chinese-founded online marketplace. The immense growth of Shein, known for its competitive pricing and online-only model, has prompted Inditex and other retail giants like H&M to explore ways to stay competitive in the face of Shein’s budget-friendly offerings.
Zara, a leader in fast fashion, faced challenges in maintaining its competitive edge on pricing. Inditex’s decision to raise prices at Zara’s core brand as a measure to protect profit margins and cater to a more upmarket clientele created a gap in the budget-friendly segment. Lefties, originally conceived as an outlet for Zara’s excess inventory, is now a crucial element of Inditex’s strategy to address this gap by offering affordable options such as 17.99-euro jeans, 7.99-euro dresses, and 5.99-euro handbags.
Lefties, now present in 17 countries, including Spain, Mexico, and Saudi Arabia, signifies Inditex’s commitment to securing a position in the value-driven market. Despite Zara’s dominance in terms of sales and store numbers, Lefties has shown consistent growth, particularly in Spain and Portugal, where it has expanded amid changing consumer preferences and the competitive landscape influenced by Shein’s attractively low prices.
In Spain, Lefties has witnessed notable growth, reaching 5 million customers in 2023, trailing closely behind Shein’s estimated 5.2 million customers. The move reflects Inditex’s strategic response to Shein’s significant market share, with the latter holding an estimated 18% of the global fast-fashion retail market. Lefties leverages social media platforms like Instagram and TikTok, adopting a strategy similar to Shein by featuring micro-influencers, diverging from Zara’s high-fashion aesthetic in its social media marketing approach. This retail battle underscores Inditex’s commitment to capturing the attention and loyalty of the Gen Z market, emphasizing affordability and trendy fashion choices.
