Zara’s International Pricing: A Focus on Southeast Asia

When expanding into new markets, prices are difficult to get right as local consumers’ perceived value differ greatly. This report dives into Zara’s international pricing strategies in Southeast Asia, with focus on the localised approach adopted by the fast fashion giant.

Written by Atiqah KamarudinOctober 14, 2020


Key Insights

  • A Localised Approach: Zara tailored its pricing strategy by market, which resulted in Southeast Asia generally priced at least 30% higher than its home country, Spain.
  • Competitive Categories: Jeans are more affordable in Zara Malaysia compared to Indonesia and Singapore, with USD 30-40 as the most common price range amongst the fast fashion brands.
  • Tiered Pricing Strategy: Zara has shown success with a clear good-better-best pricing strategy based on fashionability.

Late to e-commerce, Zara’s parent company, Inditex SA, now plans to invest USD3 billion in online operations, due to Covid-19. The Spanish fashion group has reportedly bounced back from its pandemic woes, as online sales jumped by 74% in the first half of the year.

To capitalise on the e-commerce boom, more brands are embarking on their digital journey. However, prices remain complex to get right, especially in a new market. As 30% of top fashion giants’ sales come from Asia, let’s look at how Zara deploys its pricing strategy, specifically in the Southeast Asia region.

This report sheds light on international pricing strategies by Zara in a global environment. Over 140,000 data points were screened from January to September 2020 across the womenswear and menswear categories on Zara Spain, UK, US, Singapore, Indonesia and Malaysia.


All data used in this report comes from products retailing online as tracked by Omnilytics, unless otherwise mentioned.

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A Global Strategy

Consumers are used to seeing products priced differently across countries. With more options and information at their disposal, brands need to tread carefully when pricing products to effectively serve the markets.

Localised Approach

Converting to local currency based on foreign exchange rate or applying a fixed percentage markup are some common approaches undertaken by brands expanding to other markets. However, these strategies fail to account for local consumers’ perceived values. Instead, brands need to take a holistic approach when setting prices, including understanding market demand and assessing the competitive landscape.

Chart 1 shows how the fast fashion giant Zara does it. Data revealed that the brand’s products were the cheapest in its own home country, with the median price at USD31.15. The market with the highest price was the UAE, which was 69% more expensive than in Spain.

In the Southeast Asia region, Zara’s clothing was priced between 32% and 59% higher than the origin country. Indonesia and Malaysia were among the least expensive, while consumers in Thailand were paying a premium for the same product. This is due to the high import tax imposed on foreign brands in Thailand.


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Category Pricing Across Markets

Granular analysis and monitoring pricing by category are critical not only for assortment and pricing optimisation. These actions also enable brands to spot opportunities in any market.

Competitive Categories

Zara’s products in Singapore were priced consistently higher for both womenswear and menswear categories. Men’s Shoes saw the highest price variation, with a staggering 52% difference compared to Spain.

Meanwhile, the womenswear categories in Malaysia had competitive prices. Dresses and Outerwear were the cheapest compared to its neighbouring countries, while Tops, Pants & Leggings and Bags were only marginally higher than Indonesia.

For menswear, Jeans was the cheapest in Zara Malaysia. This was driven by the competitive landscape in Malaysia for the category, which will be explored when discussing pricing amongst the competitors (Chart 6). Indonesia saw the most competitive price for Outerwear, as it was priced 10% lower than in Singapore. Zara tailored its assortment to suit the country’s climate, offering 40% more lightweight outerwear SKUs than the store in Spain.

This shows how Zara deployed its pricing strategy based on the local consumer lifestyle and market relevance.


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Category Pricing by Competitor

Evaluating competitors’ full price distribution with sell-out performance helps brands to gauge the optimal price points to set for the right products.

Different Positioning

In Indonesia, Zara’s Tops mainly sat in the USD 10-40 bracket, with the most SKU count in the USD 30-40 with 903 SKUs. The brand’s strategy in delivering good quality fashionable products enabled it to charge a higher price in the market. With a clear good-better-best strategy, it drove an above average sell-out for the category at 69%, despite higher price points.

Zara’s close competitor, Mango, shared a similar distribution of good-better-best pricing strategy. However, it achieved higher full price sell-out rate than Zara at 81%, backed by consumers’ preference for its pared-back and clean designs. This is in line with the shift towards minimal dressing.

Meanwhile, H&M’s pricing structure differs largely from the two brands. Its “good” pricing, at USD 0-10 bracket delivered the strongest sell-out, attracting the price-sensitive consumers. Its fashion items in the “best” tier of USD 20 and above failed to drive high sell-outs, despite priced 2x lower than its counterparts.

Analysing the degree of fashionability with varying product attributes gives greater visibility into the pricing dynamic, as illustrated in the subsequent slide.


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Category Pricing by Competitor (cont’d)

Distinctive Styles

Overall, the three fast fashion giants had clear styles differentiating each price tier that resulted in strong sell-outs. While all brands did offer in-demand pieces, Zara’s products were more progressive with elaborate and trend-led designs.

Although Tops in Zara Indonesia were priced at least 13% higher than in Spain, the strategy worked for the brand as it remained competitive in the market. However, Mango’s clean and minimal aesthetics resonated more with consumers, as it achieved strong full price sell-out of at least 65% across the USD 10-40 range.

Brands studying the competitive landscape need to understand their positioning in the market to launch their products at the right price. Establishing direct competitors not only helps brands understand their pricing and assortment strategies better, but also provides a holistic view of the market demand.


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This is an excerpt of the report.
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Meet the Author

Atiqah Kamarudin

Nur Atiqah Kamarudin is a Senior Business Intelligence Analyst at Omnilytics. With past experience at Nielsen and Euromonitor, she has spent years analysing data and unearthing insights to help brands and retailers make informed decisions. She currently produces reports on the fashion industry and its changing retail scene across the United States, United Kingdom, Australia and Southeast Asia.

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