Dismantling Uniforms: The Global Attack Of Japanese Fashion Concept

In early October 2019, the Japanese clothing brand UNIQLO entered the India market, landing in New Delhi's first UNIQLO store.

Entering the India market is the largest market development plan of Ryui Masachika, the founder of the company, the founder of fast retailing company. Liu well faces the India market as the second China market and wants to replicate the high growth of UNIQLO in India.

Fast Retailing (06288.HK/99830.TSE) is the world's third largest clothing company after Spain's fast fashion group Inditex (Zara parent company) and Sweden's Hennes & Mauritz (H&M parent company).

In 2018, UNIQLO's overseas market sales exceeded Japan's domestic sales for the first time, of which 50% of overseas markets came from China.

China's offline retailing has been hit by the electricity supplier, but UNIQLO has maintained its pace of 70 -80 stores in China in recent years.

In recent years, the fast fashion brands in China are not having a good time in the Chinese market. The US clothing brand Forever 21, founded in the same year as UNIQLO, formally filed for bankruptcy at the end of September.

In the past three months, the 35 year old company has withdrawn from 40 global markets, including China and Japan. Before that, the Asos, Topshop and New Look of the high street brands also came out of China one after another, and their average life expectancy in the Chinese market was only three or four years.

Some brands are in turmoil and others are cooling down. Zara and H&M, which have been in China for ten years, have dramatically reduced the pace of new entity stores in the past two years, and the number of stores is in a state of net reduction.

The number of Zara stores in China decreased from 183 in 2017 to 179 at the end of 2018, while the total number of Inditex stores in the parent company decreased from 593 to 589 during the same period, according to financial reports. In 2019, Zara continued to shut down poorly managed stores in China.

The H&M situation is also not ideal. The number of shops in China at the end of 2018 decreased by 6 to 524 compared with 2017. In contrast, UNIQLO has the largest number of stores in China. As of the three quarter of 2019, there were 687 stores and planned to maintain the pace of shop opening.

In terms of revenue, UNIQLO also has the advantage. In 2018, China's market revenue was about about 20000000000 Yuan, and the H&M market in China was about about 7000000000 yuan. Zara did not publish the Chinese market data.

International fast fashion brands occupy more than 2/3 of China's fast fashion market share. The ups and downs of these brands in China have led to many thoughts: why do brands such as Forever 21 fall, but UNIQLO is becoming more and more popular?

Ryui Masa, founder of UNIQLO, is also challenged in the dominant markets of Zara and H&M, such as Europe and America, India and so on. Does the Japanese style of fashion that he values will beat the European and American companies that flaunt fashion?

Fast fashion dilemma

In June 3, 2019, customers in Jinhua, Zhejiang, snapped up UNIQLO x KAWS cooperation in the UNIQLO store on Xishi street.

Zara and other fast fashion brands are the biggest competitors in China.

The head of an international brand clothing agency told the financial reporter that the essence of the electricity supplier is to make fast fashion, and the electricity supplier's grasp of the global trend is not slower than that of Zara.

In the past, only large enterprises were catching up with the global trend and presenting the latest styles to consumers. Now the whole network is doing this. Zara is bound to be under pressure. Taobao, jitter network red live also let the electricity supplier than before, "more vigorous", this has brought a greater impact on Zara brand.

But she said that the change of consumers' mind and pursuit of life is another important reason for some fast fashion brands that are too fashionable and ignore product quality.

The brand of Zara, H&M, Forever 21 originates from Europe and the United States is a typical fast fashion brand. The product positioning is to enable female consumers to buy the big brand fashion at low prices. They follow the new elements on the T platform quickly, produce new products, do not pay attention to quality, the products are relatively fancy, and have obvious sense of design.

The style of UNIQLO is relatively dull, emphasizing the functionality and practicability of products. Consumers generally call this style "basic money". Founded in the 60s of the last century, the Japanese brands such as island village and Muji in 80s are similar to UNIQLO. They advocate such a simple and practical Japanese style.

On the Internet, young consumers calculate the fast fashion clothes that they have bought, and find that although these garments are low in price, but because they are out of date or poor in quality, they have accumulated a lot of clothes in a few years. It is not a small expense. Many consumers want to keep the costumes at the same time, and the quality is good enough, which can be recycled to meet the needs of different occasions.

Product quantity and new speed are also important differences between UNIQLO and other fast fashion brands.

As the originator of fast fashion, Zara brings 75 thousand SKU to the market every year (the smallest unit of consumer products), while the SKU of H&M is less, but it also maintains a considerable quantity. UNIQLO introduced only about 1/10 of the number of SKU in the year.

Zara is also one of the best in the industry. In the two week, H&M will probably maintain its new speed in one or two months, and UNIQLO is basically new in season.

"There are so many things in Zara and H&M. Before going to Zara and H&M shops, they always think they should be able to buy things, but every time they go in to pick up a circle, they will find that they can't buy anything." The women's clothing owner, "Liu Xiaer quilt", who has a deep understanding of the brand clothing, tells the financial reporter.

With many styles, the display of products on line and line will be chaotic. "Forever 21 website products I have never finished browsing, too much, the more downwards to see the more uncomfortable, simply do not buy it, when it comes out of new money you do not know, so there will be no expectations for new products."

Liu Xiao said by his son. From the point of view of clothing matching and practicality, some of the products of "fast" and "fashionable" are too characteristic in styles and patterns, but they do not match well. "They may feel fresh when they start wearing them, but they are tired of wearing them for one or two times."

In contrast, UNIQLO is the leader of the basic necessities of life, with a uniform product style, and sells products such as underwear and socks that consumers have basic needs over the years. "Many consumers will think that clothes are simple, but they can be matched with different styles and more practical." She said.

The product display of UNIQLO's stores also extended the simplicity of the product itself. A fast retailing company employee told finance and economics that UNIQLO's products had a fixed principle. Every product must be put in a row. Although there are not many kinds of products, each category has an overwhelming amount. In fact, users need simpler choices, and products should be rational and aesthetic. The employee said.

Ryui Masa's fashion view

Although there are many differences between UNIQLO and other international fast fashion brands, the clothing industry still attributed UNIQLO to the fast fashion category.

In 2018, 2000 workers in Indonesia's UNIQLO foundry sued the UNIQLO's low labor remuneration, and again aroused people's discussion on the sweatshop problem behind the bright fast fashion industry. However, in many ways, Ryui Masato intends to distance himself from the concept of fast fashion.

From the perspective of product quality, UNIQLO is different from other fast fashion brands. It insists on providing high quality clothing that can be repeatedly worn, and emphasizes to market and consumers that UNIQLO is "a kind of affordable and quality fashion for consumers".

In terms of product creation, the difference between UNIQLO and other fast fashion brands is that they are deeply involved in the research and development of functional fabrics, and regard the potential of mining materials as a core competitiveness that can create consumer demand.

In the early days of brand building in 1980s, UNIQLO's biggest advantage was low price, and the advantage of product end was not outstanding.

From 90s onwards, UNIQLO began to deeply participate in the research and development of upstream clothing materials. In 1998, UNIQLO developed a series of colorful warm clothing products with a light texture by using a fabric called "fleece velvet", which is an unusual material. But since then, the fleece jacket has become the "evergreen tree" product of UNIQLO in 20 years.

Afterward, UNIQLO launched its summer fast drying clothes, sunscreen clothes, winter's hot underwear, light down garments and other long and stable product lines.

Among them, the hot underwear is a Japanese synthetic material company, which provides carbon fiber materials for Boeing 787 Dreamliner, and the outer layer of light down clothing is also cooperating with Dongli. UNIQLO said that the down material of this down garment was originally used for ski wear or cold working clothes. "Dongli

UNIQLO regards maintaining high performance price ratio as another core competency. The long-term product line of UNIQLO includes cashmere cashmere sweaters, usually other brands of cashmere cashmere sweaters cost more than 2000 yuan, but UNIQLO keeps the price of hundreds of Yuan cashmere sweaters by purchasing raw materials in large quantities and at low cost.

A factory manager for UNIQLO and a number of Chinese and foreign brand costumes manufacturers told the financial reporter that the seemingly simple basic model actually requires a high demand for basic fabrics.

As a representative factory, new fabric plans are made to UNIQLO every quarter. A lady's suspenders vest, UNIQLO will require seven or eight functions, such as quick drying, deodorization and so on. He said that many fabric tests 20 times -30 times also failed to meet the requirements, need repeated testing.

Zara represents the "follow sex" of the Europeans, pursuing the version and style, and does not mind the thread on the clothes. The thread problem is a major accident for UNIQLO.

The orders of this generation factory come from many brands in Europe, the United States, Japan and China, but the person in charge said that other brands did not provide detailed standard guidance for the factory, only told the factory what to achieve, UNIQLO would issue detailed operation manuals, record operation standards, process specifications, quality control nodes, and how to carry out these requirements.

For example, UNIQLO asked the fabric not to shrink, and told the factory that when the fabric was taken back to the factory, it was first tested. Secondly, before all the fabrics were cut, it should be spread out naturally, waiting for the fabric to shrink naturally for 24 hours before cutting.

UNIQLO is required to issue records and reports for each operation node. In Tmall, Xiao Hong, Youtube and other Chinese and foreign electricity providers or social networking platforms, consumers' comments on UNIQLO products are also focused on the evaluation of "good quality" and "comfortable fabric".

CFO Okazaki Ken, a fast retailing company, believes that UNIQLO has attracted more Chinese consumers because of its more effective communication with consumers.

UNIQLO's new frequency and quantity are significantly lower than its fast fashion counterparts, but UNIQLO hopes that every new product will win popular support.

Comparing the three brand websites and App of UNIQLO, Zara and H&M, we can find that UNIQLO often conveys the message of "coming up with new products" clearly to consumers before the season change. As far as the visual scope of the screen is concerned, the product line, style and function of each product are transmitted as much as possible, and the two brands emphasize the fashion sense of models and pictures.

Weak markets in Europe and America

At present, UNIQLO operates 820 stores in Japan, 687 in China, 186 in South Korea, more than 200 in Southeast Asia, 51 in the US and 93 in Europe, and has just opened its first store in India. Liu has repeatedly expressed the hope that UNIQLO will lead the fast selling company to become the world's largest clothing company.

The competition pattern of the global garment industry is not stable. Around 2000, the world's largest clothing company was L Brands, the secret parent company of Vitoria. Gap, an american apparel company, was the runner up of the industry at that time. Now these two companies have been surpassed by the parent companies behind Zara, H&M and UNIQLO.

"The clothing brands that most consumers wear today are actually not long enough to start their own businesses. The clothing industry has a very few hundred years of business. It seems difficult to judge today's successful businesses what will happen in a few years." Roland Begg, senior partner Ren Guoqiang, told the "finance and economics" reporter that "once the brand stops in the exploration of style and style, consumers will be tired of it."

At present, the old rival of UNIQLO is already adjusting its own product strategy. "The biggest change in the past few years is that we no longer choose products with the flow, but are really concerned about what is behind the clothes, whether it is environmental protection or not, the brand is telling a good story." The factory head of supply chain services for several European and American fast fashion companies said.

She said that in recent years, H&M has slowed down the pace of catching up with fashion, returned to simplicity, paid attention to plates and fabrics, and found the dress style of Nordic style. Apart from the H&M brand, the Cos and Other stories of the parent company, which are two more quality oriented sub line products, are also growing very fast.

Germany's fast fashion brand C&A is also in transition, launching new product lines and planning to move towards more sophisticated products. Zara still sticks to its position and pursues speed. It is becoming more and more like a Internet Co, insisting on doing the most popular things and maintaining its basic fashion.

For UNIQLO, it is particularly important to maintain advantages and make up for short boards. UNIQLO has no other giant competitors in similar style in China, but small competitors have already appeared.

Ren Guoqiang said that before the Chinese consumer's basic and cost-effective demand did not have another brand with a wide range of offline chains and e-commerce channels, UNIQLO could be regarded as a dominant company.

In the Japanese market of UNIQLO, there is a cheaper basic clothing chain brand, which has been growing faster than UNIQLO in the past few years. In addition, similar to the UNIQLO style, more high-end brands and MUJI products.

In the Chinese market, the copycat of UNIQLO has appeared. Some brands that follow the UNIQLO supply chain began selling similar lightweight dresses, rib fabric tops, basic T-shirts, women's long skirts and so on at official website and Tmall store, and the price was only 1/3 of UNIQLO.

"In the face of increased competition, a brand may be forced to shake its underlying strategy under market pressure, which is a potential risk for UNIQLO." Ren Guoqiang said.

In fact, Ryui Masa had swung across the basic strategy. Before and after 2010, in order to compete with Zara and H&M, UNIQLO had launched too many fashion oriented products outside its core products, which ultimately affected the performance of UNIQLO. At that time, stock analysts were pessimistic about the potential of UNIQLO, saying that "UNIQLO could not continue to provide market liquidity". This situation prompted Liu well to adjust its strategy in 2011 and return to its core products, and its performance has gradually improved.

In another traditional dominant market, South Korea, UNIQLO also faced challenges. Because of the trade friction between Japan and South Korea, Korean consumers are indifferent to Japanese brands.

At the same time, the 8 seconds of SamSung group, which is similar to UNIQLO's "play", is rising. This brand has long been eyeing the UNIQLO, and it has a good growth during the period of Japan and South Korea's bad faith.

Another big challenge for UNIQLO is its European and American markets. UNIQLO entered the Chinese and European markets in 2001, but its European market did not really become profitable until 2017.

Ryui Masa put forward the goal of opening 1000 stores in the United States in 2012, and the plan was shelved in 2015 because of the sales failure. At present, UNIQLO has only 51 stores in the United States and is still in a state of loss.

Ren Guoqiang said that European and American consumers have a higher degree of inclusiveness for products such as Zara, which are uniquely designed and in line with the latest trend. The typical fast fashion brands have a more solid foundation in the European and American markets. UNIQLO's research on Asian fashion models is more in-depth and more in line with Asians' aesthetic. This is also the reason why UNIQLO has been more successful in China and lagged behind in Europe and America so far.

In Europe and the United States, UNIQLO's basic strategic competitors are more, and the Japanese style aesthetics that UNIQLO insists on can not fully satisfy the needs of some European and American people. Its taste and cost performance advantages in the Chinese market have not yet been highlighted in the European and American markets.

"Quite a number of products in European and American fashion industry are basic, consumers like to buy basic funds, and local brands also spend a lot of effort and have many good brands." The former OEM said.

Primark, C&A, Abercrombie & Fitch, Hollister, American Eagle, Gap and other brands have quite a part of products are competitive products of UNIQLO, a large number of young tide brands, such as Quick Silver, brand influence is also getting better and better.

She said that these brands are more vivid on the basis of basic funds, and they are Americans' favorite styles. Because of diet and physical reasons, many European and American people do not have the pursuit of warmth by Chinese and Japanese consumers. Therefore, UNIQLO's functional underwear is hard to sell in Europe and America as well as in China.

In addition, Europeans and Americans prefer soft and light T-shirts to pursue relaxation. The version of UNIQLO T-shirt is relatively hard.

Ren Guoqiang believes that clothing consumption is often emotional, clothing is adapted to a generation of consumption, popular thinking, consumers will also be happy with new clothes, will hope to have new faces, new trend to stimulate the desire to buy. "For large enterprises such as UNIQLO, they should not be complacent and keep improving themselves."