Fast Marketing Group CEO Ryui Masa Admits That The Price Strategy Has Gone Wrong.

The 2016 fiscal year report released by the fast retailing company of UNIQLO showed that the annual operating income of the group from last September 1st to August 31st this year was 1 trillion and 784 billion 600 million yen, up 6.2% over the same period last year.

The overall operating profit fell 22.6% from last year to 127 billion 200 million yen.

The total profits of the parent company accounted for 48 billion yen in the year, down 56.3% compared to the same period last year.

In response, CEO Ryui Masa, a fast selling group, admitted that it was wrong to adopt the price increase strategy, and at the same time indicated that price adjustments would be carried out around the world to boost its performance.

It is reported that UNIQLO's rise in prices has led to a decline in passenger traffic, making it imperative for UNIQLO parent Xun marketing group to re adjust its price. The price reduction measures will cover the whole world, with a maximum decline of 30%.

2014-2015 years, due to

The impact of the depreciation of the yen has led to an increase in the cost of raw materials and the increase in labor production costs of the OEM factories. The XXX group has made two different price increases.

In July 2014, the average price of UNIQLO autumn and winter products increased by 5%. In 2015, the average price of UNIQLO products increased by 10%.

UNIQLO prices have made up for the devaluation of Japanese yen and the increase of raw material costs, but the volume of passenger traffic has decreased significantly.

Up to the end of February, the number of local customers in UNIQLO dropped by 6.3% and the same store sales fell by 1.9% in the first half of fiscal year.

It is worth mentioning that although the operating profit of the Greater China region is much lower than that of other markets, it still achieves 5.5%.

Speaking in a media interview in March this year, Liu said that in the past few years, the strategy of price increase adopted by UNIQLO in the whole market is wrong and will adopt a price reduction strategy for products.

Kang Lanxin, general manager of the school of dress and accessories, said that the large price adjustment of UNIQLO has a strong destructive effect on the brand, which is mainly affected by the brand.

The influence of consumer groups.

UNIQLO's advantage is high performance price ratio, the audience is sensitive to price, and the product's substitutability is strong.

After the two price increase, the price of the product exceeds the consumption of the original audience of UNIQLO.

Therefore, this part of consumers gradually turn to other brands. The loss of this kind of customers is that UNIQLO's price reduction can't be saved by one hundred percent.