Inditex retailoring China biz to fit evolving consumer behavior

China remains a strategic growth market for Inditex as the Spanish fashion group shifts its focus to more selective investments, stronger digital integration and deeper consumer engagement, said its top executive.

Speaking during a trip for the recent Tsinghua University School of Economics and Management 2026 Advisory Board Meeting in Beijing, CEO Oscar Garcia Maceiras said the group remains positive about its performance across markets, while declining to disclose sales figures for individual countries.

"We are happy with the performance of the group in the different markets," Garcia Maceiras said. "China remains for us a strategic market."

Inditex, owner of Zara, groups its global business into four regions — Spain, Europe excluding Spain, the Americas, and Asia and the rest of the world — with China included in the latter category.

The Asia and the rest of the world region accounted for 15 percent of Inditex's sales in the first half, down from 16 percent a year earlier. However, sales in the region remained positive, with China also recording year-to-date sales growth.

His comments came as Inditex marks the 20th anniversary of Zara's first store opening on the Chinese mainland.

"The relevance of China, both in physical stores and in the online space, is performing well," Garcia Maceiras said. "We are quite positive about the evolution of our business here going forward."

The CEO said the company would continue investing globally while maintaining financial discipline. "We have a very strong financial position, and we will keep executing projects in many different locations, including China."

The company has allocated 2.3 billion euros ($2.58 billion) in ordinary capital expenditure for 2026, including store openings, relocations and expansions.

However, Inditex's China strategy is no longer centered on expanding store numbers alone. Instead, the company is focusing on improving the productivity of its retail network and investing selectively in locations with stronger long-term potential.

Rather than pursuing expansion at any cost, Inditex is adopting a strategy of "selective growth", focusing on projects that can deliver strong profitability on a standalone basis.

"The idea is to find the right location with the right size and the right conditions," he said.

Inditex began its global store optimization program in 2020, with China among the markets experiencing significant changes. By July, Zara operated 53 stores and Zara Home had 11 stores in the Chinese market, mainly concentrated in major cities, down significantly from Zara's peak store count in 2018.

The reduction in store numbers, however, does not represent a retreat from the Chinese market, Garcia Maceiras said. Instead, the company is seeking to create a more efficient store network that better matches changing consumer behavior.

In China, Inditex has continued upgrading its presence across Zara, Zara Home and Massimo Dutti. The company has reopened renovated stores in major cities and plans further investments.

Garcia Maceiras said physical stores remain a critical part of Inditex's integrated business model.

Globally, online sales account for around 26 percent of Inditex's total revenue, while about half of online orders are connected to physical stores through services, as around 60 percent of online returns are made through physical stores and around 20 percent of online orders are collected in store too.

"It is not possible to explain the strength of our online business without taking into consideration how relevant physical stores are as operational support," he said.

In September, Zara launched its official flagship store on JD.com.

Inditex is also using China as a testing ground for localized collaborations and consumer experiences. Garcia Maceiras cited a recent capsule collection with British designer John Galliano, saying China was among a limited number of global markets to receive the collection, which sold out quickly.

wangzhuoqiong@chinadaily.com.cn