25% Of Revenue Comes From China, And Behind The Mad Battle Of UNIQLO Is The Sadness Of Domestic "Foundries".

In June 3rd, UNIQLO X Kaws shop was hit by customers and even clothes on model props. In essence, the Uniqlo X KAWS's "chaos" is the same as the "chaos" appeared in every sale of sneakers in recent years, and the only difference is that this time the level of mad fighting is a bit exaggerated.

This "chaos" can also be seen as a microcosm of UNIQLO's rapid expansion in China in recent years. According to earnings data, in the first half of fiscal year 2018/19, UNIQLO's revenue and profit growth rate in mainland China maintained at a high level of about 20%. In the latest Forbes list, Ryui Masa, founder of UNIQLO's parent company, successfully reached Japan's richest man.

What's interesting is that there are 128 06288-HK OEM factories in China, accounting for 50% of its total. In other words, in addition to design elements, nearly half of UNIQLO's products are genuine Chinese products.

Crazy "KAWS battle", clothing brand led by design elements.

Since the early morning of June 3rd, a "KAWS battle" took the lead in online shopping mall. Many fans fans rush to open the shopping website on time. However, to welcome them is not the pleasure of zero spike, but the collapse of web server.

On the other hand, "there are too many visitors at the moment, please try again later". On the other side, "one single sale exceeds 30 thousand pieces, and the official flagship store has gone off the shelves".

Finally, online sales, UNIQLO requires some products to purchase ID links, and the sales date is from June 3rd to 9.

While buying online crazily, the purchase at the same time began to be "white hot" at the beginning.

In the past, the 100 meter sprint to the store was crawling forward, and even some buyers were too excited to admit the wrong door. It was said that many people who rob T were rushes to the "famous brand products" directly.

After a mad rush in the morning of June 3rd, all the joint stores of the major UNIQLO stores were sold out. The cashier of the Hong Kong Hui Center store in East China told us that there was a long queue before opening the door, from 10 a.m. to 1 p.m., and basically short selling in the case of the purchase restriction.

The cashier introduced 1000 stocks, and now has more than 40 spare parts. The sales volume is the first in 7 stores in two districts of East China. The remaining 40 are common in the joint name, so there is some surplus. The most popular is the white bottom printing (Changsha net red landmarks), and the door was sold out.

In the rush to buy the army, there are a lot of cattle and Chinese mothers. Some of them buy many T-shirts, and they take the same size clothes as they are. They are not for their own use. On the secondhand commodity platform, a joint T-shirt and cloth bag have been sold by many people. Originally priced at 99 yuan T-shirt, the highest price was 199 yuan.

More crazy, online shopping UNIQLO stores panic, from time to time there are noisy, looting and other news. In order to seize a T-shirt, many users even dressed the clothes worn by store models.

It is reported that this is the sixth quarter UT jointly launched by UNIQLO and New York contemporary artist KAWS, integrating KAWS's classic roles of COMPANION and BFF, plus signboard XX eye design, which is full of fun. Every season's new releases can bring the market "looting". We can see the tremendous influence of the artist's design factors in clothing brand sales.

KAWS is an American graffiti artist whose works were sold in Sotheby's spring auction in Hongkong in 2019 at HK $115 million 900 thousand. This season, the new series of UT has been featured in a wide range of sculptures and works since the early days of KAWS's creation. There are 12 adult suits, 6 children's wear and 3 canvas bags.

50% of the foundries in China, focusing on the Greater China Circle overseas market.

It is worth noting that although UNIQLO brand is still a Japanese brand, according to the earnings data released by its parent company Xun Marketing Co., as of May 2019, 128 of the 242 foundries in the world were distributed in China, accounting for over 50% of the total. In other words, in addition to design elements, nearly half of UNIQLO's products are genuine Chinese products.

In fact, since XXX proposed the strategy of globalization, its revenue growth from overseas markets is much faster than that of the domestic market. From 2010 to 2017, the average annual growth rate of sales growth in Japan was only 6.5%, while the average annual compound growth rate in overseas markets was 29.2%.

In 2018, the proportion of overseas sales increased from 16% in 2010 to 43% in 2018. Among them, the overseas income of UNIQLO brand increased by 26.6% to 896 billion 300 million yuan, accounting for 51.1% of the total brand revenue, and for the first time exceeded the income of UNIQLO in Japan. The overseas market is dominated by China led by greater China, occupying 25% of the market share.

In the first half fiscal year of 2018/19, the total revenue of UNIQLO brand increased by 580 billion yuan, up 14.3% from the same period last year, and its operating profit was 88 billion 400 million yen, an increase of 9.6% over the same period last year.

Despite the downward pressure on the Greater China economy, the gains and profits of UNIQLO brands still have double-digit growth. Among them, China's mainland market revenue and profit growth rate remained at a high level of about 20%.

It is not hard to see that the 35 year old UNIQLO, which has been established for over the past decade, has exhausted its growth dividends in Japan. But as the company speeds up its overseas expansion, especially in the long run of the Greater China market, UNIQLO has become a fast fashion giant in the world and has maintained rapid growth.

In the 2018/19 semi annual report released by XXX limited, as of May 14th, XXX group has 242 foundries in 11 countries, including China, Indonesia and Burma. With the rise of labor costs, fast marketing began to transfer productivity to Southeast Asian countries, but considering the stability of labor and productivity, China's foundry still accounts for a large proportion.

Unlike the dominant position in brand production, Chinese designers or design institutes are rarely seen in the design of UNIQLO brand. What is more, some Chinese designers have been abolished by UNIQLO for alleged plagiarism. In May 2019, a designer named LI WEN PEI was revoked by UNIQLO for her plagiarism and was awarded the award.

From the representative factory to the design organization, the domestic enterprises still have a long way to go.

In April 11, 2019, the Forbes magazine published the latest 50 richest list. Ryui Masa, President and chairman of fast marketing group, successfully defeated the Softbank Sun Zhengyi, winning the richest man in Japan with a fortune of $24 billion 900 million.

It is understood that this is the first time that Ryui Masa has returned to the top since 2016. According to the ranking data, in the past year, Ryui Masa has been the fastest growing fortune among the 50, with an increase of US $5 billion 600 million.

In the past 2018 fiscal year, XXX group realized 2 trillion and 130 billion yuan of total revenue, an increase of 14.5% over the same period last year, and realized a net profit of 154 billion 800 million yen, a 29.9% increase over the previous fiscal year, helping Ryui Masato become the richest holder in Japan. The fast selling group's success is mainly due to its contribution to the sales of UNIQLO in Greater China.

For the future development of enterprises, Ryui Masa hopes that XXX group will replace Inditex, the parent company of H&M and Zara, to become the world's largest garment manufacturer in the future.

He said that UNIQLO is working with Google and other hi-tech enterprises to use its AI to analyze trends, climate change and other information in order to accurately predict customer demand. In addition, UNIQLO has introduced many technical equipment such as automatic retailer and intelligent customer service, all of which show that UNIQLO wants to make greater progress in the garment industry by using technological advantages.

This is probably why UNIQLO, founded in 1984, as an "older generation" of the international garment industry, can still associate with the words "young", "fashionable" and "casual wear". This is the result of the application of technology elements, and the trend of the top design elements.

For domestic textile enterprises, there are not many leisure and fashion brands that can be named. At the moment, it is more important to let the domestic market out of hand, and become an international brand manufacturer such as UNIQLO, and also bear the risk of international industrial chain transfer.

The current "uniformed" looting of UNIQLO is not only a blind pursuit of the brand of UNIQLO, but rather a narrower alternative within the absence of the brand of domestic textile enterprises. If there are enough domestic brands in the market, consumers' buying behavior will be more rational. To achieve this, the Chinese textile enterprises still have a long way to go to complete the representative factory's brand design organization.

Conclusion:

This is also a reminder for us that when we focus on the development of Internet and semiconductor technology, we also need our own gap in the field of consumption, which involves people's daily necessities. Industrial upgrading should not only emphasize technological development, increase production efficiency, but also enhance enterprise's design inspiration and market concept.

Innovation is not just about technological development, institutional change, but also the adjustment of ideas and the discovery of inspiration. From a large garment producing country to a large garment brand country, Chinese textile enterprises need to shoulder the responsibilities of the times.