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Analysis On The Operation Of UNIQLO

2022/4/21 10:33:00 0

Uniqlo

Recently, UNIQLO's parent company, fast retailing group, released its mid-term report for the fiscal year 2022 up to February this year. During the reporting period, the total profit from its comprehensive operation increased by 12.7% to 189.2 billion yen (about RMB 9.3 billion); The total income of the group reached 1218.977 billion yen (about 61.9 billion yuan), an increase of 1.3% year-on-year.

Behind the seemingly good performance data, there are also worries about UNIQLO.

Weak main battlefields in Japan and greater China

The business of FMCG is divided into UNIQLO business division in Japan, UNIQLO business division in overseas, Gu business division and global brand business division.

The growth of Quni and its branches in Southeast Asia and Southeast Asia mainly came from the performance of the companies in North America, South Asia and Oceania. And the group's UNIQLO and excellent two brands In Japan and greater China, both revenue and profit fell.

Specifically, in terms of UNIQLO business division in Japan, the total accumulated income during the reporting period was 442.5 billion yen (down 10.2% year-on-year), and the total operating profit was 80.9 billion yen (down 17.3% year-on-year). Compared with the same period of last year, Shuangshuang dropped sharply. On the one hand, the sales volume of household clothing and other commodities meeting home demand and airism mask were strong, resulting in the high benchmark; On the other hand, opportunities are lost due to the shortage of winter best-selling goods. In the first half of the year, the same store sales decreased by 9.0%. E-commerce sales also decreased slightly year-on-year, to 72.4 billion yen, a slight decrease of 1.9% year-on-year; However, it is about 40% higher than the same period in fy2020.

In terms of overseas UNIQLO business segments, the total revenue in the first half of fiscal year 2022 was 593.2 billion yen (a year-on-year increase of 13.7%), and the total operating profit was 100.3 billion yen (a year-on-year increase of 49.7%), both revenue and profit increased significantly. UNIQLO performed well in Southeast Asia, South Asia and Oceania, North America and Europe. The operating profit of North America and Europe accounted for about 20% of the overseas UNIQLO business division, second only to about 55% of the Greater China region, and became one of the group's main revenue sources.

According to the announcement, during the reporting period, FMCG recorded income of 306.77 billion yen in Greater China (310.807 billion yen in the same period of last year), a year-on-year decrease of 1.3%; At the same time, the revenue accounted for 25.2% of the current total revenue of FMCG (25.8% in the same period of last year), with a slight decrease. Despite the decline in revenue in Greater China, the Greater China market is still the largest overseas market in terms of revenue.

As for the performance narrowing in Greater China, FMCG pointed out that the main reason was that Mainland China's willingness to consume has been greatly weakened by the epidemic. As a matter of fact, the report points out that the profits and profits of Hong Kong and Taiwan have increased. This also means that the mainland market is facing the risk of declining performance.

In addition, in the Gu (excellent) business division, the total revenue in the first half of 2022 was 122.8 billion yen (down 7.4% year-on-year), and the total operating profit was 9.3 billion yen( Down 40.9% year on year )Fast retailing group said that the main reason was that the temperature continued to warm at the beginning of the season, which led to the poor sales of autumn clothes, while the sales of winter clothes were good, but the production and logistics were delayed, resulting in the loss of opportunities. In addition, the price and transportation of raw materials also lead to the rise of cost. In order to expand the online store business, the logistics and brand marketing expenses also increase.

In terms of stores, in March this year, Wu pinhui, global senior vice president of fast retailing group and Chief Marketing Officer (CMO) of UNIQLO Greater China, said that in the future, UNIQLO China would maintain the opening speed of 80 to 100 stores a year, and at the same time, it would sink its stores to third and fourth tier cities. It can be seen that UNIQLO still has long-term investment confidence in the Chinese market.

   The last dignity of fast fashion

In the article, from "fashion" and "moxa" to "American and American brands" such as "fashion" and "moxa", it has been more and more difficult to win over all kinds of brands, such as fashion, moxa, moxa, etc.

On April 14, a shares of La chapel will enter the delisting and consolidation period. Soon, the Shanghai Stock Exchange will delist its shares and terminate its listing.

In 2019, Forever 21 will sell itself after withdrawing from China; In August 2020, the Dutch clothing brand C & A will be sold; At the end of 2020, Etam egger will go bankrupt and go into liquidation; In 2020, INDITEX group, the parent company of Zara, announced that it planned to close 1000-1200 stores from 2020 to 2021, accounting for 13% - 16% of the total number of existing stores in the world; In early 2021, French women's brand cachecache was also on sale.

These fast fashion brands that accompanied the growth of the post-80-90 generation also declined.

In contrast, former competitors have left one after another, and UNIQLO still has a firm foothold in the market. "The trend is changing rapidly, but only the style will last forever." Ms. Chanel's words are very appropriate to describe UNIQLO. UNIQLO can stand among a number of fast fashion brands, perhaps because its style makes it the most unlikely brand to be "fast fashion".

Fast retailing group said that in order to become the world's first brand, it has been implementing and spreading the concept of "lifewear clothing life". Over the past few decades, UNIQLO has implanted the impression of comfort, versatility and high cost performance to consumers in terms of fabric and quality. "Basic" has also become UNIQLO's main style.

As a "senior fan" of UNIQLO, Lele, born in 1995, has already figured out UNIQLO. She often shares with her friends what she has bought in this promotion, and she also criticizes UNIQLO's "tradition" which has not changed for many years. The original price of casual pants was 199 yuan / piece last month, which turned to 149 yuan / piece this month, and 129 yuan / piece next month.

UNIQLO does not seem to be shy of repeated labeling. The labels are very casual. Often, the two discount labels are not aligned, the corners are not even, and you can tear them to see the last price.

Lele is not surprised at this kind of thing. In addition to often buying discounted goods, she also found the "treasure land" of UNIQLO. Near the fitting room, she often placed various kinds of clothes. These goods may have some defects or stains that ordinary people can't see. After asking the salesperson, she learned that the prices of these goods are about 1-3% off the original price.

For Lele, she can't afford luxury goods, but she is not willing to buy miscellaneous brands or online shopping. UNIQLO is the best choice for her, one-stop shopping, clothing brand long-term reliable, service is also guaranteed. UNIQLO is a stable and long-term choice for her than entering Zara, H & M and other stores now.

   UNIQLO is being eroded

In contrast to Lele, in the two years after Yao Yao graduated from University, UNIQLO was the most famous brand in her wardrobe, including down jacket in winter, dress and sun proof suit in summer, scarf and underwear.

After so many years, Yaoyao no longer regards UNIQLO as a must-have shop when shopping. She prefers personalized and fashionable clothes. Brands of professional sports, changeable trends and professional underwear are everywhere in the market. In terms of price, she is also more willing to accept clothes of more than 1000 yuan to replace a series of "basic items" from UNIQLO. After all, UNIQLO meets clothes in every street.

"UNIQLO is more like a toolbox." Yao Yao says that now she only buys certain things, such as autumn clothes, autumn trousers and sun proof clothes. These goods are not high in price and have relative quality assurance, but they are highly replaceable. "I don't want to go shopping even when I buy it." She hasn't been to UNIQLO for a long time. The last time she bought her family a set of pajamas the winter before last.

With the improvement of Chinese cultural confidence and consumption level, the consumption consciousness of generation Z is awakening and the consumption concept is gradually changing. As for the brand premium of many foreign brands, domestic consumers do not pay. With the increasing number of new consumer brands, the market share of the last batch of fast fashion brands that disappeared is being divided.

At the same time, those young brands that are good at e-commerce operation and Internet marketing can adapt to market changes more quickly, go to battle with light clothes and are easier to transform.

UNIQLO has long seized the opportunity to transform to e-commerce, realizing the integration of e-commerce and store inventory information of FMCG. Customers can place orders online, deliver goods from stores or pick up goods from stores. UNIQLO got the bonus of e-commerce, and tmall double 11 women's wear list has been the top 1 for six years.

However, on the double 11 in 2021, UNIQLO lost its first place and fell to the third place. The first and second place are itib and bosden respectively.

It is worth mentioning that at that time, itib was only a cutting-edge brand that had just been established for about a year. Relying on the "live + independent designer" model, it took the Weiya live room as the main sales channel. The products were designed by independent designers, and itib provided supply chain production.

In recent years, UNIQLO's product innovation mainly relies on CO branding and cooperates with designers of luxury brands to launch UNIQLO style co branded products, such as ut co branded with artist kaws and collaboration series with designer Jill sang, which are all sought after.

In addition, with many cultural IP, animation image and other co branding is also catering to the new generation of young people. Xiaohuangren, cherry balls, manwei series and so on. In the first half of April alone, UNIQLO launched seven co branding cooperation projects with bubble mart, mobile Gundam, Paul & Joe women's wear, New York luxury fashion brand theory, UNIQLO MAME, JW Anderson master's couple wear, Doraemon co branded UT, etc.

Compared with UNIQLO's "toolbox" shopping, its biggest crisis seems to come from the addition of There is no other product innovative design besides the joint brand, and there is no "hot model" like HEATTECH thermal insulation series for many years . Take underwear as an example. Uberas, which has become popular because of the "no size underwear", has been born. Brands such as banana interior, inside and outside are all in the comfort underwear series, directly seizing UNIQLO's original market share.


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