Ryui Masa: UNIQLO Price Rise Strategy Error Will Be Price Adjustment

The 2016 fiscal year report released by the parent company shows that the annual operating income of the group from September 1st to August 31st this year is 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.

In the 2014-2015 year, due to the impact of the exchange rate, the depreciation of the Japanese yen resulted in an increase in the cost of raw materials and the increase in labor production costs of the OEM factories. The XXX group 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%.

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%.

In an interview this March, he said that in the past few years, the strategy of price increase adopted by UNIQLO in the whole market was wrong and the price reduction strategy should be adopted.

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

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 exceeded the psychological price of the original audience's consumption of UNIQLO, so this part of consumers gradually turned to others.

The loss of this kind of customer is that the lower price of the uniqo can not be redeemed by one hundred percent.