Competition Among Fast Fashion Giants Is Becoming Increasingly Fierce.

High fever, Japan

Chain brand Uniqlo (UNIQLO), Sweden's fast fashion giant H&M and

Competition among parent companies such as Inditex SA has become increasingly fierce.

Because of the warm winter, the overall situation of clothing retailing is not very good.

Gap Inc, an American Apparel retail group with Old Navy and Banana Republic brands, has recently been underperforming and forced to cut prices to attract consumers and shut down more than 10 stores.

Rating agency Standard&Poo recently pferred Gap Inc's bonds to junk level.

In order to succeed in leisure and fashion, the size of an enterprise is very important.

Compared with other retail giants, UNIQLO is still relatively small, with 1734 stores in 17 countries, including 44 stores in the United States, 449 in China and 846 in Japan.

H&M has more than 4000 stores in the world, Gap Inc has 3700 stores, and Inditex has 7000 stores.

Uniqlo

Although scale has no advantage over other groups, size does not determine success or failure.

Many analysts believe that the key to future development of UNIQLO is to create a unique brand image while providing cost-effective products.

CEO Stuart Green, Asia Pacific consulting firm Interbrand, said: "if you want to make breakthroughs, UNIQLO must provide a more personalized shopping experience.

While maintaining the quality of products, we should establish a deeper emotional connection with consumers and increase their loyalty to the brand.

This is not a very easy thing. "

Interbrand listed UNIQLO as the most valuable retail brand in Japan, and according to Forbes's investigation, founder Liu Jing is the richest person in Japan.

Due to the impact of warm winter, UNIQLO's coat, HeatTech underwear and other winter clothing sales have been greatly affected, resulting in a slowdown in profit growth, and Fast Retailing has also been hit.

In the 2015 fiscal year ended August, the profit of fast selling was estimated at 60 billion yen, down 46% from the same period last year.

Analysts believe that in order to enter the new growth stage, UNIQLO needs to further expand the scale of online sales, and adjust the strategy of Asian markets based on regional characteristics to attract important consumer groups such as suburban consumers in the Americas.

At present, the development of the electricity market is in full swing. Consumers are more inclined to use digital platforms and social networks to choose brands.

In the face of overwhelming information on the Internet, brands need to display information on their own while playing the information of information filters, and better communicate with consumers.

In order to further expand the global market, UNIQLO has taken several key strategies:

Recruiting, hiring key personnel

Some of the talents absorbed by UNIQLO in recent years include:

French designer Christophe Lemaire, who worked for Herm s and Lacoste.

He is currently the head of UNIQLO's research center in Paris; (see the previous report, "the latest designer changes in UNIQLO, Under Armour, Dirk Bikkembergs").

International brand expert, Chinese American John Jay.

He used to make brand advertising for companies like Nike, Coca-Cola and Microsoft.

Jay, global creative president of Fast Retailing, said: "no matter Beijing or New York, there are many similarities between the characteristics and needs of young people.

We have only explored a small part of these needs.

UNIQLO has great potential in the future.

Cooperate with the opinion leaders from all walks of life to enhance product characteristics.

In the future planning of Ryui Matsushi, in addition to reducing costs, improving efficiency and reassessing pricing strategies, one of the most important strategies is to work together with the opinion leaders of all walks of life to add a distinctive "fashion" feature to UNIQLO products.

UNIQLO's current partners include:

Nigo, founder of Japan tide brand The Bathing Ape.

Through cooperation with Nigo, UNIQLO's T-shirts are more popular.

Other sources of inspiration for the uniqo T - shirt include pop artists Andy Warhol, Mickey Mouse and Japanese traditional Kabuki, and so on.

The French editor Carine Roitfield, the French version of Vogue, brings a unique design style to stores.

Tennis stars Kei Nishikori and Novak Djokovic promote their sportswear.

Hana Tajima, designer of Muslim costume design.

In addition to the stars, UNIQLO launched a collaboration with Liberty London, a British department store, and introduced the colorful fabric of the latter.

BNP Paribas (Paris bank) luxury industry analyst Luca Solca said: "compared with other large fashion retailers, UNIQLO's advantage is that they do not focus on following the fashion trend, but strive to provide consumers with quality, reasonable prices of products.

On this basis, they collaborate with opinion leaders to add fashion and avant-garde elements to their costumes and attract consumers.

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Inditex

ZARA's parent company, Spanish apparel retail group Inditex SA, released some of its financial data on Wednesday, better than expected.

The fast-paced distribution mode helps them successfully surpass competitors such as H&M.

The latter failed to meet analysts' expectations.

As of the second quarter of April, part of the financial data are as follows:

Excluding the exchange rate effect, the first quarter sales in the second quarter increased by 15% compared to the same period last year, higher than the 9% growth of the main competitor H&M in May.

Operating profit grew 6% to 705 million euros, higher than analysts estimate of 696 million euros.

Share prices rose 3.3% over the same period, higher than the 1.4% increase in H&M share price.

"The warm weather this winter has had a great impact on most retailers. The strong performance of Inditex is mainly due to their advantages in business mode."

Jamie Merriman, analyst at Sanford C.Bernstein wrote.

So far, too warm climate has had a great impact on the sales of H&M. "

As the largest apparel retailer in the world, Inditex is developing online sales while increasing the number of physical stores.

CEO Pablo Isla of Inditex said that because the consumers usually buy some other commodities when they return to the store, the development of the electricity supplier has also promoted the sales of the physical stores.

Anne Critchlow, an analyst at Societe Generale, estimates that the proportion of electricity sales to total sales this year may reach 6%, a double that of three years ago.

(above: Inditex's brand Collection)

"So far, the high growth rate of Inditex has been maintained for a whole year.

We don't think this can last forever. "

Critchlow said.

She expects that the comparable sales growth of Inditex will be around 10% to 11% this quarter. "

By the end of this year, Inditex plans to ensure that all its brands will launch e-commerce business in all European countries and Turkey.

Inditex most of the production facilities and logistics networks are located in Spain, and therefore face the problem of rising wages.

In the past two years, the average wage level in Spain has risen by 5%, which will have a great impact on the profitability of Inditex in the next three years.