* Launch set for autumn-winter season
* Tmall is consistent with image, CEO says
* China is Inditex's second largest market
* Online sales driving growth
By Sarah Morris
MADRID, June 11 Zara owner Inditex, the
world's largest fashion retailer, plans to join China's
fast-growing Tmall online marketplace to strengthen its position
in a country that is already its second biggest by store numbers
Tmall is run by Chinese e-commerce giant Alibaba
IPO-ALIB.N, which last year handled more than 1.5 trillion
yuan ($240 billion) of transactions for 231 million active users
across its three main Chinese online marketplaces - more than
Amazon and eBay Inc combined.
Tmall offers virtual store fronts to merchants who set their
own prices and handle their own logistics for nearly everything
but payments. Other Western brands to join TMall recently
include Britain's Burberry and ASOS.
Inditex has expanded rapidly in China over the last decade
to more than 457 stores at the end of January, which analysts
estimate account for about 5 percent of its sales.
The Spanish group launched its own online Zara store in
China in 2012 to tap a booming e-commerce market and reach
consumers in smaller cities and towns without a Zara shop.
A recent analysis by McKinsey Global Institute forecast
online retail sales in China will reach $420-$650 billion by
2020 - as much as the United States, Japanese, UK, German and
French markets combined.
Inditex's expansion in China has stolen a march on
arch-rival Hennes & Mauritz, which had 205 stores in
the country as of Nov. 30 and plans to roll out an online
service there this year.
The Spanish firm said on Wednesday that it would launch Zara
on Tmall for its autumn-winter 2014 collection, while continuing
to sell through its own website in China.
Normally, Inditex prefers to operate its own websites in
order to control its brand image although it occasionally sells
products through other sites, such as through ASOS for its Pull
& Bear brand in the UK.
Chief Executive Pablo Isla told analysts the Tmall model
should allow the firm to keep control of its image.
"It is nothing different to online sales through our own
webpage," he said. "It is like opening a store in a shopping
mall, so ... it's very, very consistent with our image."
Inditex already has an e-commerce presence in 25 markets and
will add South Korea and Mexico in September, it also announced
on Wednesday as it reported sales rose 11 percent in local
currencies between Feb. 1 and June 8.
It does not give separate figures for online sales, but
e-commerce is forecast by some analysts to eventually account
for a quarter of the fashion market and Inditex is seen as
especially well placed to benefit from the trend because of its
high-margin garments and centralised logistics.
"We believe e-commerce is ... underappreciated and may cause
sales growth to accelerate in the near term relative to our and
the market's expectations," said Bernstein analyst Jamie
($1 = 6.2277 Chinese Yuan Renminbi)
(Editing by Emma Thomasson and Mark Potter)