UNIQLO Expands China'S Market To Produce Worries

UNIQLO currently ranks fifth in the world, behind the famous brands such as ZARA and H&M, and its market share in Japan has been eroded by competitors.

At this time, the founder of the company, Liu Jing, is placing his hopes in the Chinese market.

Liu Jing is giving China's president Pan Ning the task of achieving the goal of 100 stores as soon as possible in the next fiscal year, and expanding at 100 stores a year in the next 3-5 years.

Pan Ning decided that the future will be based on Shanghai, Beijing and Guangzhou as well as the second tier cities.

When the layout of the first tier cities is over, the second tier cities will be redeployed.

It is worrying that such a large-scale expansion requires tens of thousands of new employees every year to keep up with talent training.

In addition, 85% of UNIQLO's products come from 70 Chinese foundries. Can the productivity be met at high speed expansion?

Its peers, such as ZARA, usually have thousands of foundries.

　　快速擴張 

Looking out from UNIQLO's headquarters building in Tokyo, it can overlook the entire Tokyo.

Like the view here, UNIQLO's shops have been covered in every corner of their eyesight.

As of February 2010, there were 793 stores in Japan, ranking first in Japan's leisure apparel brand.

UNIQLO expanded slightly abroad.

In the fiscal year of 2009 (up to August of the year), UNIQLO achieved a sales income of 685 billion yen, with a profit of 108 billion 600 million yen, an increase of 24% over the same period last year.

Only 5.5% of sales come from abroad.

In fact, since 2001, UNIQLO's market share in Japan has been saturated, and there is no room for further expansion.

Meanwhile, other foreign brands have also entered the Japanese market and developed rapidly.

This makes Ryui Masa, founder of UNIQLO, nervous.

Last year, Ryui Masago formulated the development plan for the company in the next ten years. By 2020, the sales revenue reached 5 trillion yen.

Such a sales target can only be achieved by the Japanese domestic market, and can only be achieved by relying on the market outside Japan.

Data show that China's casual wear

The consumer market now has a total level of 456 billion yuan. It is estimated that the annual compound growth rate of the industry from 2007 to 2010 is expected to reach about 14%.

This is what Liu well values.

In the next few years, Liu Jing is giving Pan Ning the task of starting from 2010, to realize the number of 100 stores in one to two years as soon as possible, and then expand the speed of 100 stores each year in the next 3-5 years.

Currently, UNIQLO owns 47 stores in mainland China, 13 stores in Hongkong, and 61 flagship stores in collaboration with Taobao.

Pan Ning, President of UNIQLO China, said that in the 2010 fiscal year, by the end of August, the number of outlets would be open to 70.

That is to say, in the next 4 months, UNIQLO will open nearly 10 stores in China.

In addition to continuing to open stores, UNIQLO also introduced foreign flagship store models to China.

In May 15th of this year, UNIQLO will open a flagship store in Nanjing West Road, Shanghai.

The flagship store costs $30 million, and its operating area will reach 3300 square meters. It will become the largest flagship store in UNIQLO.

Pan Ning revealed that after the flagship store in Shanghai, UNIQLO will also open its flagship store in Beijing and Guangzhou.

In March 31st, willow well was in an interview with Japan's Tokyo headquarters, saying that UNIQLO hopes to achieve more sales in China in the next ten years than in Japan, with the youth reaching 1 trillion yen.

　　隱憂 

Like other retail businesses, there are also risks associated with rapid expansion, such as unsustainable capital, insufficient talent reserves and poor productivity.

Pan Ning said frankly, because UNIQLO operates Direct stores, the speed of expansion will be limited.

But Pan Ning said UNIQLO was not short of money.

UNIQLO currently has a market value of 120 billion yuan.

In the just released 2010 China Daily, sales of UNIQLO grew by 31.8%, to 35 billion 300 million yuan, and net profit of 4 billion 100 million yuan, an increase of 55.7% over the same period last year.

In 2010, UNIQLO's sales target was 61 billion 500 million yuan in sales revenue.

Relatively speaking, Pan Ning is more concerned about talent reserves.

UNIQLO has a very strict personnel training system, called "UNIQLO University", which aims to cultivate specialized institutions established by talents, and has such a mechanism in every branch of the world.

Such a training system comes out of a mature staff selling skill, but it also prolongs the training time of talents.

This does not seem to keep pace with the expansion of UNIQLO.

According to the annual rate of 100 stores, the average number of shop assistants per store is 100 shopkeeper and 9900 salesperson each year.

This is a challenge for UNIQLO.

Pan Ning revealed that on the one hand, UNIQLO will recruit fresh graduates to enter the company for training. In 2010, UNIQLO will recruit 180 fresh graduates. On the other hand, it will supplement other ways, for example, dig out people from other companies.

"Personnel training and rapid growth are the two wheels of a car, and the two are indispensable."

Ryui Masa said.

Apparently, he sold clothes.

Entrepreneurs who are the richest in Japan are more worried about talent.

In addition, about 85% of UNIQLO's products sold around the world come from 70 cooperative factories in China.

These factories are currently supporting the daily operation of 2258 stores in UNIQLO.

But with the expansion, is the production capacity of these factories worrying enough?

"Of course we will expand the number of cooperative factories."

Ryui Masa said.

He did not disclose specific figures for the expansion of the cooperative plant.

But Ryui Masa said there is a very clear guideline, that is, the less we want to cooperate, the better.

Instead, it will strengthen cooperation with existing factories and push them to invest overseas.