UNIQLO Wants To Expand At High Speed In China.

Japan's fast fashion giant, UNIQLO, plans to expand to 1000 by 2020, and the Chinese market is becoming an increasingly important driving force for Japan's fast fashion UNIQLO. In the first 9 months ended May 31st, UNIQLO's operating income in overseas markets reached 820 billion 500 million yen, and the Chinese market remained the main driving force for its overseas business growth.

Industry analysts believe that the rapid growth of UNIQLO's performance in the Chinese market is inseparable from the brand's aggressive expansion strategy. In addition to opening nearly 100 stores a year, the electricity and digital businesses combined with offline shops are also advancing smoothly.

Meanwhile, the parent company of UNIQLO will launch a new personnel system in the spring of 2020:

Starting salaries for new employees, including fresh graduates, rose by about 20%.

To provide more promotions and salaries for young employees who have been employed for 3-5 years:

To provide employees with global job opportunities, Japan's annual revenue will exceed 10 million yen (about 640 thousand yuan), and the annual income of employees in the US and Europe will reach about 30 million yen (about 1 million 920 thousand yuan).

According to public information, UNIQLO was founded in 1984. It is the core brand of Japan Xun marketing group. Liu Ting, chairman and general manager of XXX group, is the first to introduce a hypermarket style clothing sales mode in Japan. Through the unique commodity planning, development and sales system, it realizes the low cost of shop operation, and leads UNIQLO into the 500 most powerful brand in the world. Starting from a small clothing store selling Western-style clothes, the company has grown into one of the most famous clothing brands internationally.

According to the reporter's earnings report, the three quarter of May 31st, the sales revenue of the fast selling group of UNIQLO parent company increased by 7% to 1 trillion and 820 billion yen, or 115 billion 600 million yuan, and its QQ brand, the first three quarters of the year, was 96 billion 600 million yuan, up 14.4% over the same period of 2019. Among them, driven by a 20% increase in net profit in the mainland of China, the net profit of Greater China has achieved double-digit growth, operating profit increased by 3.7% to 247 billion 600 million yen, or 15 billion 700 million yuan. Although UNIQLO's revenues and operating profits in the Japanese market decreased by 0.5% and 19.5% respectively, UNIQLO's overseas business revenue increased by 14.6%, of which China's sales increased to 402 billion 600 million yen, which was 25 billion 600 million yuan. Greater China and Southeast Asia have become an important engine for the growth of UNIQLO business.

As of the end of August 2019, the number of stores in UNIQLO (UNIQLO) will reach 820, including the employees' franchise stores. The number of overseas UNIQLO (UNIQLO) stores will reach 1392, and the number of GU (excellent) stores will reach 420. The number of branches of the global brand business is expected to reach 982, and the total number of brand stores in the group is expected to reach 3614.

Shi Hongmei, an analyst at Orient Securities, said that after years of deep ploughing in the local market, UNIQLO's share in the Japanese market continued to increase. But in 2012, the expansion of the local stores in Japan basically stagnated, and more business strategies of small stores were promoted. The same store growth became the main driving force for the growth of Japanese sales in UNIQLO. Considering the limited market space in Japan and Japan's close economic stagnation, the internationalization strategy of UNIQLO began to accelerate as compared with the huge potential of overseas emerging markets. By 2015, the sales revenue of XXX group reached 1 trillion and 680 billion yen, up 21.64% compared to the same period last year, and its net profit was 110 billion yen, up 47.60% compared to the same period last year. When the company opened new overseas stores 165 to 798, the total number of stores in greater China was 467, and the proportion of overseas income of UNIQLO brand increased to 43.63%. By the 2018 fiscal year, the company's overseas income has surpassed that of the mainland.

In the 2018 fiscal year, thanks to the strong growth in the Chinese market, the sales revenue and net profit of XXX group increased by 14.37% and 29.79% respectively, compared with the 17 digit revenue growth in 2018. In contrast, Shi Hongmei believes that its similar competitive brands such as ZARA, H&M and other revenue growth have slowed to single digit, and GAP has been negative for many years. At the same time, UNIQLO's overseas expansion has not stopped. It has captured the similar form and culture of consumers in Asia, and has made rapid expansion in the Asia Pacific region headed by China, breaking through the bottleneck of local growth, and constantly sharing the cake of the global market. In fiscal year 2018, there were 170 overseas stores in UNIQLO brand, 78 in China, and 4 in the number of stores in China in the same period. The number of all brands in H&M group in China increased by 24. ZARA

From the two tier market, UNIQLO's share price rose from 30 thousand yen in September 2017 to nearly 70 thousand yen, and its stock price rose 130%, and its valuation also increased from 17 times 25 times PE low to 38 times.

In the fast fashion industry, all the giants are showing signs of fatigue. UNIQLO's singing is particularly eye-catching. The reason behind this is that Shi Hongmei believes that this is closely related to the development stage of the current Chinese consumer market. China's per capita disposable income of urban areas is about 5500 US dollars, and the overall macro-economy is in a slowing down stage, which is close to Japan in the middle and late 80s. At the same time, the development stage of consumer culture in China is similar to that, which happened to be the social foundation for the rapid development of UNIQLO in Japan.

Observation, with the gradual slowing down of the growth of domestic economy and residents' income, consumers are beginning to get rid of the blind worship of high-end brands and high unit prices. While the middle and high-income groups are increasing in overall consumption ability, they are more concerned about the promotion of high-end goods to their own living quality, the end of the conspicuous consumption era, consumers returning to rational consumption, and successfully conforming to the consumers' pursuit of cost-effective products. The fast development of the Xun group in Japan was benefited from that. Through its UNIQLO and GU brand, it provided consumers with high quality casual clothing at high price. On the one hand, it guaranteed the quality of products with low SKU and large single quantity and super quality suppliers. On the other hand, it reduced costs by efficient production chain management and achieved super low price multiplying effect.

In the view of Shi Hongmei, the influence of UNIQLO's singing on the domestic brand is very important. It also shows that insisting on price performance ratio is the foundation for positioning the public's leisure apparel industry, especially in the current social environment, the demand for price performance is constantly improving. From the perspective of the development of the industry, before the fast fashion boom of 2015, ZARA captured consumers with frequent new and fast changing modes. From 16 years, the whole fast fashion industry began to become weak. Although the fast selling group experienced a brief downturn in this area, and even once was joked because of the lack of innovation in style, no matter how the industry environment changed, the company always adhered to the high cost performance as the fundamental, which is consistent with the popular positioning of casual wear.

Shi Hongmei emphasized that for most consumers, though they sometimes pursue high-end labels and personalized labels, most of them still focus on basic daily wear, and more importantly, the comfort and cost performance of products. Especially in the context of the overall slowdown of China's macro-economy and the increasingly rational consumption of people, high performance price ratio will be the core of the mass leisure clothing brand.