<p align="justify">Zalora is one of Asia’s leading online fashion stores. It was founded in 2012.It is one of the largest and the fastest growing e-commerce fashion accessories retailer in Southeast Asia. It is present in Indonesia, Singapore, Thailand, Hong Kong, Vietnam, Philippines, and Brunei. It sells both fashion and footwear products of more than 500 brands both local and international. Zalora is characterized by easy to use website, fun shopping experience, safe and fast shopping with free delivery. It offers a very large variety of products with a very easy return policy (Zalora, 2017)<br />
Following is a detailed Porter Five Forces Model Analysis of Zalora:
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<h2 align="justify">Competitive Rivalry – High</h2>
<p align="justify">Zalora is facing a high level of competitive rivalry. There are a large number of similar online fashion stores and even generic retailers like Amazon, Wal-Mart, and eBay which are operating online and in addition to non-fashion products, also sell fashion products of most of the brands Zalora covers. The second reason is that Zalora is limited to only the South East region while these giants cater for the whole globe with very small delivery costs. They also offer various e-commerce features just like Zalora. However, Zalora is offering free delivery in its particular region, making it more attractive for the people of its region. Thus, Zalora is facing a high level of competitive rivalry in its industry.
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<h2 align="justify">Threat of New Entrants – Low</h2>
<p align="justify">Fashion accessories and shoes is a world of products that revolves around brand names. The brand of the product and the brand which is retailing it, both. Establishing an e-commerce setup requires a large capital investment in order to purchase inventory, store it in a warehouse, and purchase a dynamic website and then strong distribution to ensure quick delivery and quick returns. Economies of scale have to be established. Customers are brand loyal. All these factors increase the entry barriers to this industry. The players already established have spent huge investments on products, inventory management, distribution channels, advanced technologies, and customer financial security that they have captured huge market shares and earned the trust of buyers online. This all makes the threat of new entrant low for Zalora.
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<h2 align="justify">Bargaining Power of Suppliers – Low</h2>
<p align="justify">In the online retailing industry, the cost of switching suppliers is very little. There are a large number of suppliers that are willing to supply the same branded clothes and shoes to Zalora. Some of the suppliers of Zalora are DNC Supplies, EZ Threads, and others. All of these suppliers face intense competition. Therefore, none of them is in a position to bargain or attempt to influence the market prices. Another aspect is the large number of substitute inputs for the industry (WikiWealth, 2016). Thus, overall bargaining power of the suppliers for Zalora is low.
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<h2 align="justify">Bargaining Power of Buyers – High</h2>
<p align="justify">Zalora sells fashion apparels and shoes were online. It does not do its own manufacturing or have its own brand. Rather it sells the products of over 500 other brands. But, it isn’t the only online store catering for the products of these brands. ; Many other such online stores more established and more reputed than Zalora are in the market. Therefore, a buyer in the online fashion industry has a number of options, with little or no switching cost. Buyers are brand conscious and brand loyal but all the online stores are selling the similar products of all these brands. The second aspect is the security and trust. Since online purchasing involves credit cards; a matter of a secure transaction is involved. ; Also, in the past, there have been a number of cases reported of online frauds where the product is shown as an original on the website, while the one the buyer gets is a replica. Later, these sites make returns or refunds very difficult. Therefore, a buyer in this industry has a high bargaining power.
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<h2 align="justify">Threat of Substitutes – High</h2>
<p align="justify">The substitute to online shopping is physically visiting a retailer or a brand outlet and purchasing the required products. It is very easy to lose customers in the e-commerce sector. A customer who receives a replica product or faces trouble in returns or refunds will be afraid to shop online even from reputed stores like Zalora. He would prefer to visit a local retailer such as Wal-Mart and shop there. Therefore, the threat of substitution is high for Zalora.</p>
<h2 align="justify">References</h2>
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WikiWealth, 2016. Zalora &#8211; Five Forces Analysis. [Online] Available at: <a href="http://www.wikiwealth.com/five-forces:zalora">http://www.wikiwealth.com/five-forces:zalora</a> [Accessed 15 June 2017].<br />
Zalora, 2017. About ZALORA. [Online] Available at: <a href="https://www.zalora.com.my/about/">https://www.zalora.com.my/about/</a> [Accessed 15 June 2017].</p>
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