Why Does UNIQLO Choose To Expand Continuously As The Fashion Industry Performance Slows Down Year By Year?

In December 27th, the official micro-blog announced that from December 27th -30, UNIQLO will open 4 new stores, which is another large-scale expansion after the 9 stores opened in December 20th.

According to the earnings report released by the fast marketing group of UNIQLO parent company, from the first quarter of fiscal year 2018, the overseas UNIQLO division revenue performance has surpassed that of Japan, and its profit performance is also approaching the Japanese UNIQLO level.

Especially in the third quarter of the Greater China region, the profit performance was much better than expected, and the sales volume of the same store increased by double digits.

Industry experts say that the fast fashion brands such as UNIQLO should focus on diversified development both online and offline, so as to maintain a firm foothold.

13 shops in half a month

According to the world clothing and shoe net, 4 new stores opened by UNIQLO, including Changsha Kade one center store, Zhangjiagang Wanda Plaza store, Yuncheng Wanda Plaza store and Beijing Kade MALL palace store, and 9 stores opened in December 20th. In less than half a month, UNIQLO opened 13 stores continuously.

In December 14th, UNIQLO just announced that the number of stores in mainland China has exceeded 660.

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Industry performance is slowing down year by year, while brands are closing up, UNIQLO has chosen to expand continuously.

2018, including New Look, TOPSHOP, including many fast fashion.

They all chose to reduce the number of stores and maintain stable performance.

Among them, New Look has even chosen to withdraw from the Chinese market. Now it has entered the final clearance stage, and many stores have used ultra low discount sales.

Against this background, UNIQLO continues to expand against the trend.

The 2018 earnings report released by UNIQLO parent company Xun marketing group showed that the group's total performance income in fiscal year 2018 amounted to 21300 billion yen, an increase of 14.4% over the same period last year.

Among them, overseas UNIQLO business segment total revenue grew 26.6% year-on-year, operating profit increased by 62.6% over the same period.

Overseas UNIQLO's total annual revenue exceeded the Japanese UNIQLO business segment for the first time in 2018, and the annual operating profit also expanded to the same level as that of Japan.

As far as the Greater China region is concerned, the same store net sales have maintained a sustained growth during the period. The sales of online platforms account for 15% of the total revenue of the Greater China region.

China is becoming more and more dependent.

Some analysts believe that UNIQLO's expansion plan in China will make UNIQLO's dependence on the Chinese market more and more strong.

It is understood that more than half of UNIQLO's raw materials factories come from China. Although there are recent ideas and moves to move factories to Southeast Asian countries, strong sales still benefit from the contribution of the Chinese market.

In contrast, UNIQLO's performance in Japan has been getting worse.

Up to now, there are more than 780 stores in Japan, and more than 660 stores in mainland China.

Although Japan is still the main market of UNIQLO, its performance in Japan has been declining.

According to the financial report issued by uniqo in November, its sales in the Japanese market fell 4.3% year on year, and sales have declined for two months in a row; in addition, the volume of passenger traffic declined by 1.7% and the price of passenger was down by 2.7%.

Facing the decline of the local market, UNIQLO can only develop overseas markets vigorously. Xun has said that the medium term vision of the group is to become a "digital consumer retail enterprise".

To achieve this goal, the group will strive to expand overseas UNIQLO and GU (UNIQLO sister brand) business.

In addition to continuing to develop the Japanese market, GU Division will also expand its international market scale by focusing on Greater China and South Korea.

Faster competition in fashion industry

In fact, many brands have failed to keep up with the development of local consumption upgrading.

Zhang Peiying, an honorary consultant and fashion expert of the China luxury Confederation, said: "a brand can only expand from a single channel online or offline, so that it can not bring consumers a better consumption experience."

Zhang Peiying said, on the surface, the cost of online construction is low, and the service age is getting faster and faster. Online has gradually become the main market of fast fashion brands. However, although the advantages of online stores are obvious, offline stores are also essential. In the future, the two will complement each other in order to earn more profits for enterprises.

In addition, the competition brought by other developed brands leads to the withdrawal of some brands from the Chinese market. Therefore, it is very important for the brand to adjust its strategy and change its consumption concept in the new retail environment.

Fast fashion brands have experienced a rapid development stage after entering the Chinese market. But with the market saturation and the competition among brands, fast fashion has gradually entered the bottleneck stage. In order to change the performance that has been slowing down year by year, brand names are beginning to try new changes.

Zhang Peiying said that at present, UNIQLO has been well developed under the impetus of the Chinese market, but it is also necessary to strengthen the expansion of other markets, consolidate the core of "fast fashion" and "fashion" of fast fashion brands, and at the same time pay attention to the diversified development of online and offline industries, so as to maintain a firm foothold.

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