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UNIQLO'S Half Yearly Reimbursement Sales In Greater China Decreased

2022/5/11 21:02:00 0

Uniqlo

According to the semi annual report of fiscal year 2022 (September 1, 2021 to February 28, 2022) released in mid April, UNIQLO's sales in Greater China were 15.57 billion yuan, a year-on-year decrease of 1.3%. In the past few years, UNIQLO had a good time in China. Except for the decline of the epidemic in fiscal year 2020, UNIQLO achieved growth in the rest of the years from fiscal year 2016 to fiscal year 2021.

UNIQLO can complain that the warm winter has failed to make several of its key brands work, or it can blame the depreciation of the yen and the rise in costs, But it cannot turn a blind eye to the growth of its rivals.

Last year, 11 men's tmall remained the champion in the men's clothing store; It has been the champion of women's wear for five years in a row. It has been surpassed by domestic brands itib and bosden, which are less than two years old; UNIQLO's underwear sales lost to the domestic product ubras in 2020, and then fell further to the Shenzhen brand jiaonei last year.

Women's clothing brand list of double 11 in 2021

Chinese players are catching up, which makes UNIQLO helpless to face the dilemma of "gradually losing young people". Even though UNIQLO is constantly on-line to leverage sales with various well-known IP brands, it still can't stop young people's interest ebbing. In particular, the recently launched bubble Mart joint brand has not met with crazy robbery, but has been criticized by consumers.

However, the boss of UNIQLO, Liujing, is a Japanese dream. He also knows that the Chinese market is the key to help him surpass INDITEX, the parent company of Zara, and become the world's highest market value clothing enterprise. As a result, by the end of February, UNIQLO had 860 stores in China, surpassing 802 in Japan.

However, "sailing against the current, if you do not advance, you will retreat.". UNIQLO is the same UNIQLO, but if it fails to enter the market outside the Fifth Ring Road, its middle-class market will be occupied by its rivals sooner or later.

Become fastidious middle class, can not enter the five ring road

UNIQLO's positioning in China is the middle class market.

It is difficult to achieve a stable balance in this position, but it has always been a place for strategists.

   Because, cheap brand upgrade and high-end brand downgrade will become UNIQLO's rivals. Moreover, in today's macro-economic environment, UNIQLO's original customer base is likely to sink to find cheap alternatives.

   UNIQLO's basic model is the easiest to replace The reason is not hard to understand. The domestic brands of subsequent players are in the world factory, and even have more advantages in the supply chain. UNIQLO also has fashion styles with joint names. UT and Jill sang, formerly co branded with kaws, were once popular, but this routine is not so difficult to copy. The recent co branding, including bubble mart, has not splashed so much.

UNIQLO and bubble Mart co name UT

UT's highlight moment in brand building was the co branding of designers. But as time goes on, many customers find that UNIQLO, in order to control the overall cost, the fabric of designer co branded is often not as good as the basic one. This has become a major disincentive factor.

In addition to cost performance, UNIQLO, like other international brands, was once a trend representative in the eyes of the post-80s and 90s. However, it is necessary to maintain the cultural status of the cultural center after 95.

Last year's Xinjiang cotton incident also put pressure on UNIQLO's performance in China. UNIQLO's sales of e-commerce platforms in China fell 20% in the month following the incident. In contrast, from July to September last year, Li Ning's store sales increased by 20% - 25% year-on-year.

UNIQLO is also looking for change.

In November last year, UNIQLO opened its first global flagship store in Beijing in Sanlitun, and it is also UNIQLO's first "compound tomorrow life Museum" in China. But in March last year, UNIQLO's chief marketing officer for Greater China, Wu pinhui, had to sink its stores to third and fourth tier cities. This seemingly contradictory strategy shows UNIQLO's swing.

According to Jihai brand monitoring data, UNIQLO will add 96 stores in 2021, completing the task of adding 80-100 stores each year. However, there are 76 in the first tier, new tier and second tier cities, and only 20 in the third tier, fourth tier and fifth tier cities.

Reality has proved that people outside the Fifth Ring Road are not worthy of UNIQLO.

   In cities below the third tier, consumers are not as concerned about the subtle experience of fabrics and comfort as the first-line middle class, but pay more attention to the intuitive and visible elements of color and style. Obviously, UNIQLO can't distinguish itself from Taobao in this respect.

UNIQLO beat UNIQLO?

Liu qiangdong studied UNIQLO in 2012, and believed that cost and efficiency are the common points of JD and UNIQLO.

UNIQLO's parent company, called infomarketing group, also emphasizes the speed of optimization. But the problem is, Nowadays, the team of Chinese brands is a generation growing up under the infiltration of the Internet. Will they be inferior to UNIQLO in terms of speed?

China's e-commerce penetration rate is far higher than that of developed countries such as the United States. UNIQLO has also seized the online opportunity in China: it has achieved the integration of online and offline, and achieved the same price for the same model; There is no online distribution, only the official website and Taobao flagship stores, and all offline stores are direct stores.

UNIQLO's tmall flagship store and app

Tmall started doing small channel programs in 2018. So while gap failed and INDITEX closed its stores, UNIQLO was doing well in China, but its digital lead was limited to foreign clothing brands. If you take into account the international fashion brands under the influence of the Internet, it would not be so outstanding.

The most frightening thing about UNIQLO is that local brands like itib and ubras beat it with their best weapons.

Itib has its own "three board axe" -- designer brand Collection + super fast renovation speed + deep binding Weiya, everything is about speed. Designers who pay attention to fashion trends will design clothing items as quickly as possible. The company will quickly link with the supply chain enterprises to place orders for production. The head anchor will use the lowest price of the whole network to complete the rapid sales among the fast-moving people.

The founder of itib has more than ten years of e-commerce experience, and the online channel is more skillful than UNIQLO. This allows it to suppress UNIQLO in terms of speed.

The cost of itib's local designer collection is much lower than that of UNIQLO's co branding of designers, so it can spend more money on fabrics and other parts that affect the consumer experience. Local designers are closer to Chinese consumers than international designers and can understand their aesthetic mind faster.

Uberas, the underwear brand, also beat UNIQLO with UNIQLO.

UNIQLO itself is the industry leader in the rimless underwear, but perhaps because it failed to catch up with the trend of "her economy", there is still a big gap between the previous products and the popular models. Ubras also has its own three moves: "Ouyang Nana's endorsement + KOL planting grass on the whole platform + Weiya taking the goods", and finally successfully came out of the circle.

Uberas is based on UNIQLO's rimless base with no sizes. In the past, underwear online sales due to inaccurate size, and do not support the return of goods, so leading to a high rate of bad reviews. This step of ubras for the pain points has greatly improved this problem.

"Blaming God and blaming others" of science and technology pioneers

   Fortunately, the technology that once won by uyi Kulai has not been completely copied by his opponents.

The secret part of UNIQLO's booming manufacturing is the deep cooperation with material manufacturers and the cost reduction brought by supply chain optimization. That's how the first popular polar fleece came from. As early as the 1980s, American companies invented the fleece technology, but the cost was too high.

In 1999, UNIQLO and Chinese suppliers studied, and finally determined the process of purchasing raw materials in Japan, rethinking processing in Indonesia, and weaving, dyeing and sewing in China, which greatly reduced the cost of polar fleece.

In 2000, one-third of Japanese bought polar fleece for 1900 yen. However, the price of the single fleece in 1999 is 10000 yuan.

It was also in 1999 that Yanai saw the news of Toray and Boeing and realized that Toray's advantages in materials could be used in clothing. In 2003, HEATTECH, which was jointly developed by the two companies, came into the market, and has been iterating since then: it has upgraded anti-static, and added camellia oil to women's wear to achieve moisturizing function.

   This kind of thermal underwear, which is famous for its light weight, has sold more than 100 million pieces in 2011 and a billion pieces in 2017.

Once again, UNIQLO's advantages in materials have been brought into play by the masks in the epidemic.

UNIQLO masks are made of airism material, which was used to produce underwear. The air permeability and quick drying performance of UNIQLO masks are far better than other masks on the market. The price of the three packs was 990 yen, equivalent to 65.6 yuan. On the first day of sale, it triggered a rush to buy in the rain, and the official website collapsed for a time.

   However, UNIQLO's advantages in material technology are also being diluted. Even though there are still some popular masks, because UNIQLO's volume is already quite large, this kind of icing on the cake is difficult to bring about a fundamental turnaround in performance.

What's more, whether it's polar fleece or HEATTECH, UNIQLO's killer feature is warmth retention. But the sales of these clothes are also very sensitive to the weather, and the warm winter in recent years has caused a great negative impact. This is also mentioned by UNIQLO in several annual and quarterly reports.

   In addition to the weather, UNIQLO is complaining about the exchange rate.

Yen exchange rate

The depreciation of the yen is indeed a big factor in cost. The impact of exchange rate was emphasized at the first quarter press conference on January 13 this year. At the beginning of last year, the exchange rate of the yen against the US dollar was 100 yen to 0.96 US dollars, and by the end of the year, it was devalued to 100 yen to 0.88 US dollars, and now it has further fallen to 0.78 US dollars.

The latest half yearly report shows that greater China accounts for 55% of UNIQLO's overall operating profit. UNIQLO's price hike at the end of last year is also related to their unwillingness to give up profits. Although UNIQLO did not adopt a simple and crude way to increase the price directly, it chose to increase the proportion of medium and high-end clothes. However, the poly run strategy made because of the rising cost will suffer a serious impact in front of the local Internet brand whose user's thinking is supreme.

This means that UNIQLO's pressure to raise prices this year is on the rise.

Like other foreign brands, it seems that UNIQLO is doomed to be overtaken by more flexible local rivals. However, the only way to break the market is to break through the market, Whether we can precipitate some black technology that can improve the consumer experience may be the key to the long-term development of the industry, and it is also the core method to truly solve the "loss of young people".


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