5 Problems That UNIQLO Will Face In Developing The Chinese Market

With the performance of Greater China,

2015 was not bad.

This year, it failed to get out of the predicament encountered in the US market, and the pace of expansion in major European cities was also cautious.

In the Greater China region (mainland China, Hongkong and Taiwan), the opposite is true.

In the 2015 fiscal year, UNIQLO opened 93 new stores in Greater China, with sales exceeding 304 billion 400 million yen (about 16 billion 103 million yuan), an increase of 46.3% over the same period last year, and operating profit rose 66.1% over the same period last year.

For 13 years after coming to China, Ryui Masa, CEO of fast retailing group of UNIQLO parent company, said: "I think UNIQLO has just started in China.

From now on, UNIQLO wants more people to wear our clothes.

This reminiscent of another sentence Ryui Masa often put on the lips, "stability is the risk, not grow and die two."

Ryui Maguchi's "just starting up" UNIQLO China, of course, must continue to grow. The question is, how to grow?

Last year, in the 11 month, the number of overseas stores in UNIQLO exceeded Japan's first time.

The company, which threatened to become the world's largest apparel manufacturer and retailer, will rely more heavily on the international market, especially in the Greater China region, which has accounted for half of its overseas market revenues last year.

And when a company relies heavily on a market, it itself is "pulling the trigger and moving the whole body".

We summed up the 5 problems that UNIQLO might face. To expand the Chinese market, perhaps this is something that it will consider in the future.

Is it an opportunity for UNIQLO or the yoke of UNIQLO?

In 2002, UNIQLO entered China. It was the first fast fashion company to enter China, and was also the first to set up in China.

Platform

Brand.

According to the plan of UNIQLO, by 2020, it will open 1000 stores in Greater China, almost two times now.

To achieve this goal, UNIQLO averaged about 100 stores a year in the next 5 years.

Ryui Masano believes that the slowdown in China's economy will have an impact on UNIQLO. "The slowdown in China's economic environment and the expansion strategy of UNIQLO's business are not contradictory.

No matter what the situation is, people need to buy clothes, which are necessities of life.

This confidence is justifiable.

First of all, when the economic situation is not ideal, people will not spend money like a good economic situation. Cheap UNIQLO will be a choice.

In fact, UNIQLO's popularity in Japan depends on the burst of the economic bubble and the downturn of the economy. People tend to be sensitive to the price.

Second, there is a huge three or four line market that has not been developed.

The total number of stores in universites in Greater China reached 467 (as at the end of the 2015 fiscal year), but according to the official website of UNIQLO, more than 1/4 (126) stores were located in three cities of Beijing, Shanghai and Guangzhou.

The number of stores in 100 cities and cities with 234 stores in the city is 1.

"It has not yet understood the three or four line cities."

Jiang Jiongwen, a professor of marketing at the China Europe Business School, said that the market size of UNIQLO is still very large in China, but the market is not yet saturated and there is still room for expansion.

Compared with other fast fashion, UNIQLO has some first mover advantages.

On Tmall, it has been the "double 11" clothing sales champion for two consecutive years. The data accumulated on the electricity supplier can provide reference for the location of the channel to the three or four line city.

But last year, UNIQLO had been in the Jingdong for three months and left.

The reason for this is that speculation in the market has mostly focused on Tmall's pressure on UNIQLO.

Jiang Jiongwen, O2O researcher, agrees with the statement that "most brands will take multi platform operation." (UNIQLO quit Jingdong) may be the business conditions that the two sides do not meet.

A person familiar with the matter said that the rule is: "if you don't quit, you won't have to do it again in Tmall."

But this does not mean that UNIQLO will choose Tmall exclusively. Ryui Masa is especially careful when he is an electric supplier in China.

In August 2015, Tmall announced an exclusive cooperation agreement with 20 international brands, including no UNIQLO.

In 2014, Pan Ning, senior executive director of fast selling group and CEO of Greater China, once said that if online sales increased to 20% to 30% of the total sales of UNIQLO, the possibility of self built electric business could not be ruled out.

For UNIQLO, the cost of breaking away from Tmall is high, but the bonus of e-commerce is declining.

With more and more brands joining Tmall, UNIQLO and those big brands have gained an average cost per user. On the contrary, offline or other platforms will not be so intense.

Considering the cost performance of Tmall store is a matter of time.

Who will become the competitor of UNIQLO?

H&M, Zara, Gap, UNIQLO.

In the past for a long time, these four brands were like a fixed phrase like existence. They were compared to each other and collectively referred to as the "four fast fashion brands".

But as we mentioned in the fast fashion younger report, the threat to UNIQLO's brand may be increasing.

At this point, UNIQLO faces the same situation as any big company.

P & G's competitors are not necessarily Unilever, but Estee Lauder's competitors are definitely not just L'OREAL.

The vast majority of the long tail distracted consumers' attention, while the Internet and mobile consumption exacerbated this phenomenon.

Looking at the rise of the shopping guide industry, it is known how difficult it is to find "what is worth buying" now? Even if it is only a comparison of a basic Hoodie, there are also places to describe the pros and cons of the major brands in detail.

Random interviews were made with 18 consumers in UNIQLO stores in Beijing and Shanghai. When asked what brands you would visit when you did not go to UNIQLO, H&M and Zara were still the most frequent answers because they were "fashionable" while choosing UNIQLO for their "good quality".

"UNIQLO did not compete directly with H&M."

Jiang Jiongwen said.

"Not everyone needs fashion, but there is no need for basic money."

Huang Chuanbo, a tennis enthusiast, told the curiosity daily that he worked in the fashion industry for 3 years.

His answer can represent part of the consumer's point of view.

UNIQLO's new slogan service life LifeWear, launched in 2013, is also expressing an attitude similar to "clothes like its own people". This seems to be the distance between UNIQLO and its traditional competitors H&M or Zara: since it is not fast enough and is not so sensitive to fashion, simply do something else.

Wang Wenbo, an assistant professor of marketing at Hong Kong University Science & Technology, called such a practice "reverse positioning", which does not provide the "benefits" provided by competitors.

He believes that the "LifeWear" put forward by UNIQLO is essentially conveying the idea of "going on forever", which is opposite to the characteristics of fast fashion, fast consumption and disposable. It is another brand positioning strategy of UNIQLO on low price advantage.

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This seems to be what the uniqo has always met: a good and durable base.

LifeWear's proposal is, to a certain extent, strengthening this quality based demand and deepening the complementary relationship between UNIQLO and H&M and Zara rather than direct competition.

Since UNIQLO does not provide the hottest fashion, what exactly do Chinese consumers consume when they consume UNIQLO?

"UNIQLO's quality and fabric are good, bottoming and underwear will choose it."

Miss Wu, aged 30, said on the two floor of the flagship store of UNIQLO in Nanjing West Road, Shanghai. "If you wear a jacket, you will consider the sense of design and go to Hang Lung Plaza or the brand shop of the eight hundred friends."

Miss Wang, 25, is standing in front of the Mickey plush toy shelf priced at 79 yuan in Chaoyang District's Mall store in Beijing.

She said that the choice of UNIQLO is because its code is appropriate and the style is enough to satisfy her demand for casual clothes, "the price is also more friendly."

Similar answers appear frequently in our conversations with consumers.

In other words, when consumers purchase UNIQLO, the most important thing is their products and prices, which will continue to become the advantage of UNIQLO.

Dong Chunfang, public relations manager of marketing department of fast marketing (China), has recently stressed that UNIQLO's clothing for sports occasions is "light leisure" and "light sports". It is aimed at consumers who may not be very professional, but occasionally need sports, and may not need to buy thousands of dollars. (hope) hundreds of dollars will be able to create a light sports style of consumers. Dong Chunfang, director of marketing at the 2016 Spring Festival new product preview conference in spring and summer, is constantly emphasizing.

Cost performance is still the core competitiveness of the brand.

The question is, is that enough?

How does UNIQLO create the trend in the Chinese market?

If you want to generalize the purpose of UNIQLO's recent marketing, it is "increase the added value".

Obviously, this brand does not want people to see its performance price ratio only.

If it can be done, it is also cost-effective and cool, that is no better thing.

So you will see that UNIQLO set up a region called Disney UT Factory in its Shanghai concept store.

Consumers can choose their favorite Disney pattern on the tablet computer and print it to UT on the spot. After fixing the color, they can then pick it up.

For example, UNIQLO has set up an electronic screen in individual stores in China. When consumers stand in front of the screen, there will be street scenes in Tokyo, London and other places on the screen, making people feel like they are in different places.

So you will also see the unprecedented cross-border cooperation of UNIQLO.

In October 2015, the UNIQLO AND LEMAIRE cooperation series was sold out in China in three minutes.

Everybody's mouth to mouth is "a series of cooperation with the former design director of Hermes," and "the price of the design of the Hermes and UNIQLO".

In the spring and summer new year just released by UNIQLO in 2016, the number of design cooperation has reached 4, which has never been seen in single season.

John C Jay, the global creative director of fast marketing group, explains that UNIQLO is just reducing the distance between fashion and foundation. "We have not split fashion and foundation into two.

What we are saying is that the basic funds are becoming more sophisticated and fashionable, because if we are just a company that produces basic funds, then we will have no future. "

If UNIQLO wants to let Chinese consumers associate themselves with these added values when they consume themselves, one of the problems they must consider is how to lay down such services and experiences to more stores while letting the channel sink, and let the experience itself become something like price and texture, appearing in any place with UNIQLO.

As a technology company's UNIQLO, how to balance production, design and cost?

The director of design of UNIQLO, Tak Tak Chi, is the design director of Lssey Miyake before joining UNIQLO.

He describes the difference between the two companies. "Fashion is the topic of production, and we are looking at whether commodities are necessary to consumers.

When we were in Lssey Miyake, we created a new dress and opened up a new river.

And UNIQLO, we are standing in the center of the river, how to make the river flow more smoothly, which is what UNIQLO is doing.

Interview with Tak Cho has already talked about an unusual example: in 2012, UNIQLO had a autumn winter jacket with a dark green and light brown color.

Its ornament is a vertical chest zipper bag, echoing the 2012 Burberry Prorsum and Prorsum (Marc Jacobs).

Pointing to a single seam on the left side, Takizawa Naoki said, "double seam seam is a lot of complicated.

The single line is simpler and takes less than 20 seconds.

He said that he had cut off the Parker coat for 90 seconds, leaving everything he needed.

Making 600 thousand Parker coats saves time and cost.

Designing in UNIQLO is subtraction.

Katsuda Yukihiro, senior vice president of fast marketing group, also said that 30% to 50% of the global clothing brand profits come from the basic fund.

Even if it is basically a T shirt, there are also some parts that can be simplified.

To ridicule, this may be the reason why UNIQLO T-shirt has no waist.

This idea will be implemented in all products of UNIQLO, and it is also its design philosophy.

In theory, this is not a problem, but UNIQLO may need to face the latest ridicule, "wear uniforms, mainly look at temperament."

It is not easy to attract more people who want to dress up under the premise of maintaining this philosophy.