UNIQLO'S "China Dilemma" And "Lie Win" Era Has Passed

"This time, Internet users have memories." Consumer Zhang Yi saw a sentence written on the social platform after UNIQLO and kaws launched the joint brand again.

Different from the co branded model launched in the summer of 2019, UNIQLO co branded kaws again this time, but was "cursed".

Zhang Yi recalls that in 2019, in order to grab the co branded money, he first stayed on the Internet at 0:00 and found that it was sold out instantly. The next morning, he went to several stores in Beijing to buy it. Some scalpers fried the price to nearly 1000 yuan. UNIQLO stores in many places across the country were "captured", and there was also news that consumers were fighting to get joint brand money first.

For the same marketing routine, few people pay for UNIQLO this year.

Despite UNIQLO's special reminder that "T-shirt items are limited to 9 items per user ID and 3 items per user ID to carry bags", a UNIQLO Beijing store clerk told spirit beast that "if you buy them casually, you will find that there is a lot of stock in the back.".

In addition to the previous popular products, UNIQLO stores are full of promotional and discount products. The original price is 159 yuan, and the current price is 59 yuan. The short sleeves are 39 yuan. It seems that UNIQLO, which was rated as "cost-effective", has returned overnight.

But this time, many consumers are not buying as much as they used to.

The current situation of UNIQLO is quite different from the "wild consumption" scenario in the past.

UNIQLO's sales on China's e-commerce platforms fell more than 20% in April, foreign media reported. In the middle of this year's promotion, UNIQLO has already stepped down from the champion sales list to give way to the domestic online Red brands, falling behind by more than 770000 points in the trading index, ranking fourth.

UNIQLO has gradually stepped down from the altar in China. Behind it, there is a trend of change in the brand sales pattern. More directly, the event of "Xinjiang cotton" is pointed at.

Some time ago, foreign enterprises such as HM and UNIQLO were exposed to boycott Xinjiang cotton products, causing public anger. Subsequently, the stars announced that all cooperation with UNIQLO was terminated one after another, saying that "the motherland is above everything else, and resolutely resist and oppose any speech and behavior that pollutes and rumor China."

However, at the press conference of fast retailing group in April, UNIQLO founder Liu Jing also responded to the Xinjiang cotton incident, saying "remain neutral.".

It is the attitude of the founder that pushes the vast number of consumers to the opposite side and completely infuriates consumers.

The shop assistant told spirit beast that the Xinjiang cotton incident had a great impact. The sales volume in the store was not small and a lot of inventory was overstocked.

Inventory backlog, only by reducing prices to reverse the situation. Generally speaking, price reduction as a commercial lever is often to achieve the goal of increasing sales and reducing inventory. Therefore, two years later, I saw 39 yuan short sleeves put on the shelves in UNIQLO stores, but many consumers also reported that the UNIQLO fabric after the price reduction was not as good as before.

Since this year, UNIQLO has taken measures to reduce prices in overseas markets, especially in Japan.

On March 4, according to a statement issued by Japan express sales group, the parent company of UNIQLO, the full range of goods sold by UNIQLO and Gu brands in Japan will change from the original pre tax price to the tax inclusive price, that is, the consumption tax with a 9% reduction in Japan. "Many customers are experiencing unprecedented difficulties due to the epidemic... Therefore, the company has decided to continue to sell products at affordable prices," FMCG explained.

The epidemic has reduced the purchasing power of consumers. Under the circumstances that the objective environment of the current epidemic situation cannot be changed, UNIQLO plays a big promotion card in the hope of stimulating the purchase by way of discount. However, this price reduction does not include the Chinese market.

From the data, Japanese people's consumption power is indeed showing a downward trend.

According to a report released by the Ministry of general affairs on February 5, the average monthly actual consumption expenditure of households with more than two people in 2020 will drop by 5.3% compared with that of the previous year, which is a decrease since comparable statistics were available in 2001.

UNIQLO wants to attract customers and stimulate their purchase through various means, whether it is to reduce the price or to issue joint payment; On the other hand, clean up the inventory, promote the sales of goods, and improve the turnover rate of inventory and the speed of capital return. But it is clear that Chinese consumers are not buying as they used to, and are "abandoning" the fast fashion giant.

UNIQLO this year has been a wave of ups and downs. The Xinjiang cotton incident remained silent and was boycotted by domestic consumers. Products exported to the United States were seized by the U.S. Customs, and 45000 pieces of lingerie were recalled in Japan due to product quality problems.

UNIQLO's "water reverse" is not just about products.

According to Japanese media reports, UNIQLO closed its flagship store in shinzhai bridge, Osaka, Japan on August 1. This is UNIQLO's first "global flagship store" in Japan, which opened in October 2010. UNIQLO's move to close its first global flagship store in China has attracted a lot of attention.

As for the reason for the closure, the number of inbound tourists decreased due to the epidemic situation. In addition, the lease agreement is about to expire, so UNIQLO decided to withdraw the store.

Perhaps, looking at UNIQLO's past financial reports, we may see various reasons.

Since the outbreak of the epidemic, UNIQLO has more than 764 Direct stores in Japan, and its offline passenger flow has plummeted and suffered a huge blow.

According to the financial report, in March last year, the sales volume of the same UNIQLO store in Japan fell by 27.8% year-on-year, and the total sales volume decreased by 28.1% year-on-year. In April, UNIQLO's total sales in Japan fell 57.7% year-on-year, while comparable sales in the same store fell 56.5% year-on-year. By may, 311 UNIQLO stores had to close.

By the end of June, five UNIQLO stores in Japan had been temporarily closed and 149 stores had shortened their business hours. This led to a 17.3% year-on-year decline in June sales in Japan; The comparable sales in the same store decreased by 19.2%.

The situation in Japan is just a microcosm of UNIQLO's global situation.

Stores all over the world have been temporarily closed for several months, resulting in a sharp drop in profits. Finally, UNIQLO achieved a net of ￥ 90.3 billion in fiscal year 2020, down 44.4% year on year; Revenue was 2.01 trillion yen, down 12.3% year on year.

Although there is no deficit, this is the annual performance decline of Fast Retailing since 2017.
According to the first three quarters' performance report released by UNIQLO's parent company on July 15, the total amount of ￥ 1.69 trillion was about 99.86 billion yuan, an increase of about 9.9% compared with the same period in 2020.

It is obvious that UNIQLO's performance has also rebounded, but it will take time for UNIQLO to return to its pre epidemic level and growth.

However, it can be seen from the financial report that the new crown pneumonia epidemic has a profound impact on the operation of fast marketing group. Fast Retailing said that the e-commerce business performance of UNIQLO in Japan failed to meet expectations due to the impact of the epidemic beyond expectations, coupled with the lack of novelty for local customers and other factors. Affected by the expansion of the epidemic situation and other factors, the third quarter performance was not as expected, so the group lowered part of the full year forecast.

"Leaving aside the Xinjiang cotton incident, UNIQLO's co branded products, colors and styles are more common, which is one of the reasons why so many people don't buy them." Consumers are becoming more rational and no longer think that a joint brand of clothing is a "trendsetter," Zhang said.

During this period of time, domestic brands have sprung up. Hongxingerke, guirenniao and other brands have driven a round of emotional consumption in the market. Even though there are many slots, they are still popular, which may be one of the reasons why joint brand products are not paid attention to. Once the "old trees grow new shoots" of domestic products rise again, it is a fatal blow to UNIQLO's fast fashion brands.

Over the past few years, the Chinese market has been an overseas market contributing to UNIQLO's performance.

Online UNIQLO has always occupied the leading position of China's clothing brands, especially in the "double 11" sales promotion.

Among the nearly 1500 offline stores located overseas, 900 are in the Chinese market, which has exceeded the total number of 807 stores in Japan. It is estimated that the sales volume of China market will account for about half of the overall overseas market of UNIQLO in 2021.

It can be said that half of UNIQLO's successful military medals are contributed by Chinese consumers.

For a period of time in the past two years, UNIQLO's sales volume in Japan's domestic market was sluggish, but its sales in Greater China continued to rise. Therefore, Greater China has become one of UNIQLO's markets. As a result, even the boss of UNIQLO, Liu Jingzheng, has said frankly that the success of UNIQLO cannot be separated from the Chinese market.

At this year's UNIQLO spring and summer 2021 exhibition, fast retailing group disclosed that in the future, UNIQLO will maintain the speed of opening 80-100 stores a year in China and expand to the third and fourth tier cities. At this rate, UNIQLO will have more than 1000 stores in China by 2022.

Even so, for UNIQLO at this stage, there is still a lot to do to serve Chinese consumers well.

Perhaps for UNIQLO, the continuous output of brand concepts and values, while improving the shopping experience, are more able to hit the hearts of consumers than simple promotion and price reduction.

While China's market is gaining huge revenue, UNIQLO should also balance the pricing ideas of Japan's domestic market and overseas market. In the face of the continuous rise of Chinese local brands, it is time for UNIQLO to stop its "edge" and think about goods and services from the perspective of Chinese consumers.

After all, the "lie win" era is over.