How Did You Lose The Richest Man In Japan?

Tadashi Yanai, Liu Qi, is falling from the throne of Japan's richest man, which stems from the wealth of the world's wealthiest people, which is directly related to their share price.

In September 2014, accompanied by China's e-commerce giant Alibaba Group Holding Limited (NYSY:BABA)

The group is on the verge of listing, holding 34% stake in Alibaba at that time. As the largest shareholder of China group, SoftBank Corp. (9984:Tokyo), Softbank group shares rose sharply, and also made the fortune of Softbank boss Masayoshi Son Sun Zhengyi surpass Liu Jing Zheng, becoming Japan's richest man.

However, in 2015, Alibaba shares went down, while the Japanese stock index soared. Fast Retailing Co. Ltd. (9983.T) XXX group shares rose, and Ryui Masashige was the richest.

In the 2016 Forbes wealth list released in March 2016, Liu Jing is ranked 57 in the world's richest list with us $14 billion 600 million, while Sun Zhengyi's 117 billion dollar can only be ranked 82.

In early 2015, Uniqlo

The strategy of false price increases made the Fast Retailing Co. Ltd. fast selling group swallow its bitter fruit. After the annual report was released, the share price went down all the way, while the positive impact of Andouble economics on Japanese stocks was also negative. At the same time, the conflict with SAIC and the negative of Balun weekly were negative.

The weakening of the impact and the steady performance of the income have stimulated the stock price of Alibaba to rise to a high level. Sun Zhengyi once again climbed to the throne of Japan's richest man.

By the end of October 22, 2016, on the real time fortune list of Forbes, Sun Zhengyi ranked the richest in Japan with us $18 billion 500 million, while Liu Jing was ranked second in 17 billion 700 million dollars, while the third Keyence Corp. (6861:Tokyo) Kean Takemitsu chairman Takizaki Takehikaru's fortune only had 11 billion 600 million dollars, and it was hard to see two people back.

Of course, this article is certainly not to talk about such simple mathematical knowledge, but rather to analyze the way of Fast Retailing Co. Ltd. XXX group in the past three years, especially after the expansion of the two largest markets in China and the United States, and the international stores of Uniqlo UNIQLO have surpassed the domestic market of Japan.

By the end of August 2016, Uniqlo UNIQLO operates about 500 stores in the Greater China market (mainland China, Hongkong, Macao and Taiwan), and is only less than the Inditex SA (ITX.MI) Indo Textile Group (566 by the end of 2015) in the four fast fashion group. However, the number of Inditex SA in the Chinese market is far more than that of the Fast Retailing Co. Ltd. fast marketing group. The number of stores in the Chinese market is only about 300, but the time of entering the Chinese market is 6 years.

As Bestseller A/S A/S fashion group first entered the Chinese market, according to EU data, the group has the highest share in the Chinese apparel market. However, if there is no accident, it will probably change its position in the next two or three years or even fall to third.

The income in 2015 was 20 billion 900 million euros, and its Asia Pacific market and other smaller markets accounted for 23%, about 6 billion 670 million euros. Inditex SA did not disclose the data of mainland China and the big China separately; Hennes and Mauritz AB (Hennes) Hayne Maurice group's revenue in the 2015 fiscal year ended November 2015 was 10 billion 559 million Danish kroner, about 10 billion 500 million yuan, and 353 stores; the income of the fashion group in the 2015 fiscal year ended July 31, 2015 was 2 billion 930 million euros, and its share in the Chinese market was about 2 billion 930 million, or about 332 billion 800 million yuan. However, the large Chinese market of the fashion group was almost occupied by the mainland market, while other fast fashion groups also had a large market in Hongkong and Taiwan. The sales of the Greater China market shown in the annual report by Fast Retailing Co. Ltd. Express Group is 332 billion 800 million yen, or about 21 billion 700 million yuan; Inditex SA

Therefore, according to the Greater China market, the order of the top three companies should be Inditex SA, second Fast Retailing Co. Ltd., XXX group, Bestseller A/S fashion group only third.

However, only the discussion of the Chinese mainland market, because the three companies only Fast Retailing Co. Ltd. fast marketing group separately disclosed, so there is no conclusion for the time being. However, from the perspective of development and expansion, the Bestseller A/S fashion group will also end up to third in the future. The first second will be the dispute between Inditex SA and Fast Retailing Co. fast marketing group.

In 2013, the Fast Retailing Co. Ltd. fast forward group put forward the goal of 5 trillion in 2020 and the first in the world. To some extent, it originated from the confidence in the Chinese market, and entered the Chinese market at the latest, but achieved the fastest and best results. Meanwhile, the US market at the same time, 2020's 200 store 10 billion dollar plan is ready to go.

In 2012, Uniqlo's overseas market (mainly for the Chinese market) led to an increase of nearly 70%, which is indeed enough for fast marketing to put forward such a plan. However, Ryui Masa obviously ignored the risks in the Chinese market, intensified competition and, more importantly, the American market that once crashed.

Because of the 2020 plan, Ryui Masa even gave up the 65 year old retirement plan in February 2014. When he was 67 years old, he had to formally announce the failure of the 2020 plan after the release of the 2016 earnings report, and 5 trillion of the sales could not be reached.

Liu Jing, who was born in February 7, 1949, is putting forward the concept of "Made for All" for Uniqlo UNIQLO international expansion. However, the brand now advocates the slogan of "Life Wear".

The change of slogan stems from the pformation of brand to the lifestyle brand concept. Before that, the brand also claimed that its main competitor was Apple apple, positioning itself in the field of science and technology, because the basic products of Uniqlo, UNIQLO, had been the main technology innovation.

However, the change of slogan seems to prove that Uniqlo UNIQLO has the vision of "Made for All", but obviously, no brand can "Made for All". At least in the United States, Uniqlo and uniformed UNIQLO are unable to open up the situation, losing money continuously, and the deficit is expanding. The small scale in the European market also shows that the brand is difficult to have corresponding competitiveness in the mature market.

After a heavy blow for the Uniqlo UNIQLO, the Tadashi Yanai Ryui Masa, who fell from the richest position in Japan, should find that as the largest clothing retail brand in Asia, Uniqlo has no room for improvement in price positioning. On the contrary, downside seems to be an inevitable trend.

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At the beginning of this year, Ryui Masa's comments on the interview with Kate Finnigan, director of the Daily Telegraph director of the British Daily Telegraph were worth recollection: I am very old, and I am approaching the end of my life. I must do something before I die.

What we say and do need to be consistent. This is the most important thing.

When Liu Jing is speaking this paragraph, he is described by Kate Finnigan as "light and weak" and has no "weight" expressed by words.

It is this "understatement" that reflects the true meaning of "Made for All".

The rapid development of fast fashion is undoubtedly a sense of equality. It enables the public and the poor outside the world's 1% richest people to wear the clothes they want, not just for the sake of warmth.

The reason why Ryui Masa postponed retirement may be related to the above words, because for him, the first goal in the world may not be a real goal. The older he is, he wants to devote more energy and effort to his own painstaking business, just for "Made for All".

In 2016, when talking about the retirement of Sun Zhengyi, Ryui Masa's richest competitor, in the market, Ryui Masa said he once said to Sun Zhengyi, "you are less than 60 years old, are you going to retire? Are you kidding me?" and Sun Zhengyi himself said he would not retire, and would "come back another 5-10 years".

Although Sun Zhengyi and Liu Jing are always fighting for the richest man, the two people have maintained a good relationship. Ryui Masa is currently an external independent director of Softbank. It is said that Sun Zhengyi has played the role of lobbyist when he quit the electronic business platform. Uniqlo's Ma Yun went to Japan to persuade Ryui Masa to make Tmall Tmall.com the only third party e-commerce platform in Uniqlo in.

Because of the special historical relationship between China and Japan and the public opinion orientation of the Propaganda Department, it is difficult to comment on Japan's advantages from any angle.

However, whether it is Chinese folk or business circles, this is a contradictory mentality for Japanese national character and enterprisers. This is the same as the book on "national character" and "national characteristics" of "Ju and Dao".

However, there is a fact that it is hard to avoid the fact that the number of Japanese enterprises in Asian international brands or enterprises is the largest, covering manufacturing, automobile and technology, including the clothing industry such as Uniqlo, UNIQLO, and China, which can be called international. But even if Alibaba left China, it could even say nothing.

The ambition of Ryui Masa and fast selling can certainly be explained by the most popular "island mentality" in China. However, the feeling of "Made for All" by Liu Jing Zheng and Uniqlo UNIQLO has to be international, pcending nationality, nationality and politics.

It is different from almost all Chinese entrepreneurs' real mentality of getting money first. I do not want to dwarf Chinese enterprises and entrepreneurs here. On the contrary, I can well understand that this is what they should do from a historical and political point of view.

The specific analysis is certainly not within my capability, nor is it the focus of this article.

In any case, Ryui Masa's goal in fast selling is "ambitious", and as a listed company, it needs to beat a number of global competitors to achieve this goal.

Therefore, when the second half of 2015 began, the group growth engine - the Uniqlo market, which led by the Greater China market, showed a sharp slowdown in the international market and increased losses in the US market.

In the 2015 fiscal year (as at the end of August 2015), the Uniqlo market grew by 46.3% to 304 billion 400 million yen, while the growth rate dropped to only 9.3% in the 2016 fiscal year, while the international market in 2015 increased by more than 40% in the 2016 fiscal year.

The annual income of the international market in Greater China increased 46.3% to 304 billion 400 million yen, representing half of the 603 billion 600 million yen of Uniqlo Uniqlo, but the contribution of the region's operating profit amounted to 9, up to 38 billion 600 million yen, up 66.1% from the same period last year, while the profit of overseas Uniqlo UNIQLO business was only 43 billion 300 million yen.

Thanks to the slowing down of the Greater China market, the group's 2016 year financial year's operating profit in the Greater China market recorded a 5.5% decline, while in 2016 it reached an increase of 38 billion 600 million yen. At the same time, the business profit of Uniqlo China's UNIQLO was higher than that of Uniqlo UNIQLO's total international market from 89.1% in 2015 to 97.6%. In the Uniqlo Uniqlo market, the profit of the European market increased.

Since the international expansion in 2006, especially in 2012, the acceleration of the ambitious goal has been made. Uniqlo's performance in China has been obvious to all. In view of the limited space of the Japanese domestic market, China has become the "thigh" of the growth of Uniqlo and its fast growth in the past four years.

In the 2016 fiscal year, the net profit of fast selling was 48 billion 52 million yen, down 56.3% from a year earlier. Although the company expects the current 2017 fiscal year to increase by 108.1% to 1000 billion yen, it is still 10% less than 110 billion 27 million yen in the 2015 fiscal year.

That is to say, in three years, fast selling not only failed to achieve profit growth, but on the contrary, it experienced negative growth.

If profits can be exchanged for the market, it is understandable that it is a short-term move to move forward, but the growth rate of 20% stores in the two big markets of China and the United States does not match their income growth. More importantly, China's profitability is declining, while the losses in the US market are aggravating.

After the 2016 release of the newsletter, Not so Fast was released. From the profit and return rate, we analyzed the impact of the international expansion of Uniqlo UNIQLO on fast selling profitability, and expressed the overall performance of fast selling in the international market by "the Uniqlo do not publish the international market specific data". This is not the most important same store sales data for clothing retailers.

Our No Agency estimates that the growth rate of Uniqlo UNIQLO's same store sales in the Chinese market in fiscal 2016 is about 1% through the growth of Uniqlo Uniqlo stores and the price index of the National Bureau of statistics.

More importantly, Uniqlo UNIQLO's operating profit margin in the international market of fiscal year 2016 is only 5.7%, far below 13% of the domestic market, of which China's market operating profit is 11%, which is also lower than that of the Japanese market.

Even in the 2015 fiscal year of the year of profit growth, the operating profit margin of the Chinese market in the Uniqlo global market of UNIQLO was 7.2% and 12.7%, respectively. In the same period, the operating profit rate of the Japanese market was 15%.

In comparison with the main retail companies WACC/ROIC (Weighted Average Cost of Capital weighted average cost of capital /Return on Invested Capital capital return rate) of more than 10 billion US dollars, it is very intuitive that the positive effect of the international market investment of the Capital market of the Uniqlo group on the group's profit margin is negligible, or even worse than that of the US competitor, which is struggling this year.

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If we want to ask why, it is obvious that we need to disclose the sales of Uniqlo UNIQLO of the United States, whether it is sales, shop sales, investment and losses. Uniqlo, UNIQLO, the United States is still a reef for the market. Only Ryui Masa and fast retailing are clear about it.

If we talk about the Chinese market alone, the operating interest rate has been stable in the 85% level of the Japanese domestic market in the past two years. At present, the Chinese market has only 60% of the Japanese market. Once the number of stores in the Japanese market is equal, the cost of scale effect will be reduced when the same store sales can not be negative, and the operating profit of the Chinese market is likely to reach the Japanese market and even surpass.

What is the possibility of China's market in the US market?

If I answer this question, I believe that Ryui Masa himself may not be confident. He did not mention the goal of the US market again in the May Uniqlo Tokyo conference of 2016 autumn and winter, but said that although the US business is struggling, the United States is the most important market, and the brand has entered the market again, and is ready to rebuild the market.

Impatient investors already want Uniqlo UNIQLO to withdraw from the US market.

Including me, I also tend to think that Uniqlo and UNIQLO can actually abandon the US market.

But like all successful entrepreneurs, Ryui Masa likes to compare international expansion and continuous progress to "climbing mountains": when you climb a mountain, you will see another taller mountain climbing process that really enjoys it.

Mountain climbing is a kind of enjoyment, but there are also great risks in the process. Not everyone can climb one by one. Many people give up halfway and even die on the road.

At present, though Ryui Masa and fast selling are not at risk of falling, the setbacks in the 2016 year financial year are enough for Ryui Masa to realize that he has encountered the greatest difficulty in his old age: the profitability of the US market and the continued rapid expansion of the Chinese market and the growth of profitability.

How to move faster than the rapidly changing and increasingly competitive retail market may be Ryui Masa's solution to these difficulties. Just like his childhood experience, the world is changing too fast: growing in a mining city, bankrupting factories to a sharp decline in population, and closing schools.

This experience prompted Ryui Masa to "climb mountains" and yearn for more things.

The title and wealth of the richest man are not what Ryui Jungjing cares about. They are the most popular topics of the media and the public, or the entrepreneurs who are climbing the first mountain.

However, as at present, Koji Yanai Xun, a senior vice president for fast selling, commented on his father Ryui Masa, "my father is not a superhero".