Due To Anxiety In Japan'S Local Market, UNIQLO Will Enter India.

The past 2017 fiscal year has been a mixed year for UNIQLO.

According to the world clothing and shoe net, when the performance of the past fiscal year was announced in October 12th,

Finally, we got rid of the predicament of the loss in the last financial year, especially in the Greater China, Southeast Asia and Oceania markets.

The development of GU is still in the doldrums.

In the new quarter's earnings report, UNIQLO is at home.

The total revenue in 2017 reached 810 billion 700 million yen, an increase of 1.4% over the same period last year, but the total net profit decreased by 6.4% compared with the same period last year. In the number of stores, as of the end of February 2017, the total number of UNIQLO stores in Japan was 792, down 14 from the same period last year, and it has been stagnant for many years.

In Japan, local development is increasingly facing the ceiling, and UNIQLO keeps looking overseas.

In 2016, UNIQLO officially entered Canada, and entered Spain in 2017; in 2019, Italy will become the seventh country that UNIQLO has been stationed in Europe. Before that, China and Southeast Asia, which have been regarded as the focus of development, will continue to exert power. UNIQLO officials say that in 2020, the stores in China will reach 1000 stores, more than that of Japan, and in recent days, India market, which has long been coveted by UNIQLO, has finally come to an end.

Anxiety in Japan's domestic market

Born in 1953, UNIQLO, now more than 50 years old, has been highly recognized in Japan because of its high cost performance and quality assurance.

Japanese often use such jokes to ridicule UNIQLO's "cheap": "more than 1000 yuan for casual noodles, and 1500 yen for short sleeves of UNIQLO."

But it is such a national brand in Japan's mind that it has been faced with continuous operational difficulties in recent years. In 2016, UNIQLO's operating profit plummeted 22.6%, and its domestic performance was even worse. Its growth rate was only 2%, much lower than that of the previous year's 9%, and the number of shops has not been on the rise for many years.

In recent years, Japan's domestic growth has been sluggish. UNIQLO officials have been using many weather reasons to "prevaricate" the outside world. When explaining the annual report of fiscal year 16 and previous quarterly financial losses, the explanation given by UNIQLO official is that the weather has affected sales.

But then, as a garment manufacturer, because of the seasonal influence, Japan's UNIQLO's sensitivity to the weather should have been very strong. It is a little unreasonable to use the "weather reason" to avoid the loss many times.

In this regard, insiders pointed out that UNIQLO is evading the problem and eliminating the weather reasons. In recent years, although UNIQLO spent less on design and research and development, its technological innovation capability is going downhill.

In addition to the early launch of the wireless bra (no steel ring BRA) in early 2017, a series of new products launched by UNIQLO in 2008 for the summer "fast drying series" and "2010 year old" for male and female launched Silky Dry and Sarafine series (merged into AIRism AIRism in 2013) did not cause a strong response among consumers. In 2015, the two "raise price" move also caused a huge "disgust" in Japan, so that UNIQLO had to adjust its strategy.

The path of commercialization of UNIQLO technology is to create a new mass market by reducing costs and ultimately lowering prices.

Ma Gang, a senior garment industry analyst, commented on the product road business. "But since the feather down, UNIQLO has not seen such a technology oriented" explosive product "for a long time, and the ability of UNIQLO products to innovate is weakening or slowing down.

Of course, such new product development can not arouse the interest of Japanese nationals, and may also have an indispensable relationship with Japan's macro economic environment and consumption attitude.

It is understood that during the period from September 2012 to June 2015, the Japanese yen continued to depreciate because of the implementation of "Andouble economics", which was more than 1/3.

At the same time, the cost of the service industry caused by depreciation has been rising, while the clothing retailing industry represented by UNIQLO has also suffered tremendous pressure.

According to the data obtained from the business review, the 2016 economic and financial report released by the Japanese Cabinet Office in August 2016 shows that: in 2015, the wages of Japanese employees increased continuously for third consecutive years, and the salaries of some employees paid by the hour were at a record high.

The depreciation of the yen is considered to be the cause of rising wages in the service sector. "

But while the cost is rising, the consumption intention of young people has not increased.

Fast fashion brands are mainly targeted at young people, but the financial report shows that, even with the increase in income, young people under 39 years of age do not grow in spending for four years.

This may also explain why UNIQLO is constantly upgrading its fabric and technology products, while the purchasing power of consumers continues to decline, and the consumer environment plays a very important role in it.

The contradiction between personalized demand and the basic fashion and basic product positioning of UNIQLO is giving birth to the change of UNIQLO. In September 2017, UNIQLO began to "Customize" the route. In the store of Ginza, Sendai, Nagoya, Osaka, Bodo and other central cities in Tokyo, it was the first time to launch "semi custom products" for consumers of non standard stature. In the field of mother and infant, UNIQLO began to open up the market. I wonder if these new attempts will restore the reality of the growth of UNIQLO in Japan.

Overseas dependency syndrome

Perhaps it was early expectations for domestic growth, and UNIQLO started its own international journey very early. In recent years, UNIQLO has intensified its dependence on overseas markets.

Starting from the first overseas store in 2001, the number of overseas stores in UNIQLO has reached 1246 by the end of September this year, an increase of 139 compared with the same period last year, which is nearly 300 more than the number of domestic shops in Japan in the same period.

Over the past five years, the number of overseas stores in UNIQLO has increased by 737, an increase of 2.52 times.

Through the comparison of the number of stores at home and abroad in recent 5 years, we can clearly see that in recent years, the growth of the number of UNIQLO shops is mainly concentrated overseas, and the growth rate is almost 10% per year. In the Greater China region, this situation is even more obvious.

In China, as of August 31, 2107, UNIQLO already had 645 stores in 120 cities, and UNIQLO officials said, "in 2020, their goal was to open 1000 stores in China, thus becoming the largest country with UNIQLO shops, more than Japan." the bet on overseas markets has become a new engine for future growth of UNIQLO, and has increasingly caused UNIQLO to suffer from "overseas dependence".

In terms of operating profit, this is even more apparent. Although Japan's local UNIQLO is still ahead of the global market, UNIQLO predicts that this situation will probably reverse in 2018, and the total revenue from foreign markets will outpace the domestic market for the first time.

In addition to the Chinese market, in the 2017 earnings report issued by UNIQLO in the near future, the Southeast Asian and Oceania markets were also eye-catching. Business profits doubled and became the second pillar of the overseas market of UNIQLO, second only to the Chinese market.

Despite the good performance of China's performance, UNIQLO's financial results were satisfactory in the 2017 fiscal year, but in the strategy of focusing on overseas markets to promote growth, the fast selling group (UNIQLO parent company) has gradually shifted the focus of its expansion to the European market in order to alleviate China's dependence on the biggest overseas market, which is gradually cooling down.

In the next three years, Uniqlo stores will increase the number of European stores to 100, that is to say, the scale will double. The brand will not only enter new markets such as Italy and Spain, but also accelerate the penetration of 5 existing markets, such as France, Britain, Germany and Russia. It is hoped that the expansion of the entity will also encourage online sales.

For the uneven development at home and abroad, UNIQLO's interior is also very anxious. The founder of the UNIQLO, Liu Qi, stressed in the previous performance conference call: "overseas market is important, but UNIQLO is a Japanese company, and it must make profits in the local market."

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Enter India, internationalize without stopping

Despite the efforts to achieve the balance of development at home and abroad, UNIQLO's international expansion has never stopped.

After years of coveted India market, the fast retailing group of UNIQLO parent company has recently submitted Uniqlo UNIQLO to the relevant departments of India as an application for the single brand to enter the Asia's third largest economy. A person familiar with the India development plan of Uniqlo UNIQLO revealed that the brand will set up a wholly-owned subsidiary in India, while the current UNIQLO area is waiting for the reply from the India government.

Although living in Asia, compared with the Southeast Asian market familiar with UNIQLO, India has a great difference in dress matching because of religious and cultural customs. Friends who have seen India dance films may be impressed by India's colorful costumes.

In the past, UNIQLO's loss in the US market was also largely due to the fashion design style. To know, UNIQLO has always been using its minimalist and basic design to please users. Is it successful in special India UNIQLO?

UNIQLO China business leader said, "before entering the India market, UNIQLO has done a lot of research. After the launch of the series of costumes with Muslim characteristics with the female designer Hana Tajima, it has sold well in the Southeast Asian market, which has provided a good reference for India to enter the market." the difference in the style of dress design may not be the most important thing for UNIQLO to consider. How to find a suitable shop location and face the pressure of competitors is the biggest problem for UNIQLO to enter India.

In August this year, an economic newspaper in India quoted news that Uniqlo UNIQLO could not afford high-quality retail space, so it had to postpone its March until next year. India's less standardized and healthy retail economic environment hindered the promotion of UNIQLO business.

More serious than the low - quality retail space, Gap and H&M, the fast fashion competitor Gap and H&M, entered India in 2015, and it was understood that H&M also opened the world's largest offline entity shop in the world.

In September of that year, H&M began to infiltrate second tier cities, and it is known that e-commerce will be introduced in 2018.

For UNIQLO to enter India, these are enormous challenges.

In this regard, senior garment industry analyst Ma Gang said to the business review of product road, "UNIQLO must learn from the past experience of relying too much on physical stores, and do well in the development of online business." in recent years, e-commerce business in India has developed rapidly. Many e-commerce websites have risen rapidly, and have made considerable progress in the field of mobile payment. "In fashion design, the supply of styles, sizes and colors should be corrected according to the preferences and sizes of India consumers.

In addition, it is extremely important to take the right pricing strategy and find the right location. "

Compared to Japan and China and the European and American markets, India's economic development is still in a period of rapid growth. The trend of consumption upgrading is not obvious. How to avoid too low end brand positioning is extremely important.

As Liu said before, "every country has different preferences. First of all, we must respect it.

But how to pass the philosophy and culture of UNIQLO is a challenge.

When the whole India society is in a period of rapid economic growth and the government encourages and promotes the pformation and upgrading of the industry, the forerunner who can seize the opportunity accurately will always get unexpected returns.

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