As a Japanese clothing giant that sells well in the Chinese market, Fast Retailing Group released its 2021 fiscal year report. The financial report shows that Fast Retailing Group’s total annual revenue reached 2.13 trillion yen. Among them, the net profit attributable to the parent company of the listed company was 169.8 billion yen (approximately 9.5 billion yuan).
Consumers of Fast Retailing Group may not be familiar with it, but most people must be familiar with Uniqlo. Domestically, this clothing brand’s stores are located in first-, second-, third- and fourth-tier markets, and the stores are always crowded with people.
As far as the author knows, there are 7 major clothing brands under the Fast Retailing Group, among which Uniqlo is the company’s core brand and the main source of the group’s revenue.
This time, Fast Retailing Group was able to achieve substantial revenue growth in fiscal year 2021, mainly due to the strong improvement of UNIQLO’s overseas business, especially the Chinese market.
In the financial report, UNIQLO’s annual revenue in Greater China reached 523.3 billion yen (approximately RMB 29.9 billion), which is higher than the revenue in fiscal year 2020. Revenue increased by 16.7% year-on-year, setting the best performance in history.
You must know that Uniqlo’s total revenue in overseas markets in fiscal year 2021 is only 930.1 billion yen. The importance of Greater China to Uniqlo is self-evident.
In fact, UNIQLO has entered China for nearly 20 years. Through increased e-commerce marketing and precise insight into domestic consumer demand, UNIQLO has gained a deep reputation in the Chinese market. Consumers favor it.
After gaining popularity, UNIQLO began to vigorously build offline stores in the Chinese market. According to the financial reports released by Uniqlo over the years, between 2012 and 2018, Uniqlo opened an average of 80-90 new stores every year.
Today, Uniqlo has nearly 900 stores in the Chinese market, far exceeding the 807 stores in Japan.
Today, Uniqlo is encountering slow growth problems in Japan’s domestic market, and affected by the epidemic, the performance of other overseas countries is unsatisfactory.
Under such circumstances, Uniqlo will focus more on the Chinese market and prepare to adopt store opening tactics to maintain its dominant position in the Chinese market.
Earlier this year, Uniqlo Greater China CMO Wu Pinhui revealed that it will maintain a rate of opening 80-100 stores per year in China in the future.
At the same time, UNIQLO will also increase its digital transformation to create an omni-channel experience for consumers that integrates information, social networking, and online and offline shopping.
However, can Uniqlo’s advantage in the Chinese market really be maintained? The author thinks otherwise.
Times have changed and the Chinese market today is no longer as easy to capture as it was 20 years ago. In recent years, when the Z era has stepped onto the consumer stage, the national trend has quietly arisen. “Foreign brands” are no longer the advantages of overseas clothing giants.
Not only that, consumers are increasingly preferring domestic products, which has also forced China’s local clothing companies to improve technology, fabrics, etc., gradually narrowing the gap with overseas brands.
In addition to the rise of established domestic clothing giants, the rise of the live streaming industry has also made it easier for emerging brands to open up the market.
When domestic clothing brands compete with Uniqlo at the same level, Uniqlo’s advantages are gradually being weakened.
In addition, due to various factors such as tariffs and management costs, after Uniqlo entered the Chinese market, its price and positioning became mid-to-high-end. The mid-to-high-end market is currently the most intense “battlefield” for domestic brands.
Judging from the current situation, Uniqlo’s biggest advantage in the domestic market is probably its huge sales channels. This may also be the reason why Uniqlo has accelerated its expansion in China in recent years. Reasons for market store expansion.
While accelerating store expansion, Uniqlo is also working hard to tear off the label of “fast fashion brand” and trying to create the image of a “technology company” through fabric innovation.
This move may alleviate Uniqlo’s competitive pressure, but it is still not easy to maintain high growth in the Chinese market for a long time.
In short, although Uniqlo has achieved high revenue growth in the Chinese market, there are also hidden concerns under the growth. Let us wait and see whether Uniqlo can reach a higher level in the future. </p
