The number of Uniqlo stores in China surpasses Japan for the first time, betting that China will become Uniqlo's life-saving straw?
For a long time, Japanese brands have been widely welcomed by Chinese consumers because of their minimalist design style, and UNIQLO is undoubtedly one of the most successful Japanese brands in China. However, UNIQLO has made headlines again recently. For the first time, the number of stores has surpassed Japan. Can a full bet on China become a life-saving straw for Uniqlo?
1. Uniqlo ALL IN China
According to a report by Nikkei on the 10th, UNIQLO reopened a large number of stores due to the fact that the new crown epidemic in China has basically subsided, and its number of Chinese stores (direct sales) surpassed Japan for the first time. Fast Retailing President and President Yanai Masasay said that more stores will be opened in China. Based on the Chinese population, it is expected to open 3,000 stores. According to data, at the end of August, the number of Uniqlo stores in China reached 767, surpassing the number of direct-operated stores in Japan (764) for the first time. At the end of May, there were 745 stores, but after June, the epidemic in China has basically subsided, and Fast Retailing has expanded its store network to local cities at an average rate of 7 stores per month. Uniqlo had only 387 stores in China at the end of August 2015, and the number has doubled in five years.
On July 9, Uniqlo parent company Fast Retailing Group released sales data for the third quarter of fiscal year 2020. Due to the impact of the epidemic, Fast Retailing Group continued to lose money during the quarter, with revenue falling 39.4% and operating loss of 4.3 billion yen. As of May 31, the first nine months of the Fast Retailing Group's fiscal year 2020, consolidated operating income was 1.5449 trillion yen, a year-on-year decrease of 15.2%, and operating profit fell 46.6% to 132.3 billion yen.
By market, Fast Retailing's nuclear core products declined 35.5% brand Uniqlo third quarter revenue in its native Japan, operating profit fell 74%. Its revenue in other markets around the world fell 45% year-on-year, and its operating loss was 1.4 billion yen. In addition, the operating income of the GU brand division fell 19.1% year-on-year, operating profit fell 61.8% year-on-year, and same-store sales fell 27%. The Global Brands Division reported a 63.2% decline in revenue during the quarter and an operating loss of 6.7 billion yen. The significant loss in the quarter is inseparable from the impact of the new crown epidemic on the global retail industry. According to sales data, in May this year, Uniqlo Japan was most affected by the epidemic, with 311 physical stores temporarily suspended. At the worst of the quarter, 192 stores were closed. However, the e-commerce of Fast Retailing Group's brands performed well, with Uniqlo Japan's e-commerce channel sales rising 47.7% in the third quarter.
However, since June, sales of Uniqlo Japan and GU have begun to show signs of recovery. During the month, Uniqlo’s total sales in Japan increased by 26.2%, and GU’s same-store sales increased by 16.4%. However, Uniqlo's performance in other markets and regions in the world is quite different. Revenue and profits in the Greater China region have shown growth in May and are recovering at a strong speed. During the quarter, 6.9 billion pounds of impairment losses were mainly concentrated in the loss of physical stores in the United States and South Korea.
Uniqlo launched AIRism masks on June 19 this year. The masks are made of quick-drying and breathable fabrics. Once they are released, consumers will be rushed online and offline. This time Uniqlo puts on AIRism masks, essentially wanting to emphasize the selling point of "from the power of society to the power of clothing", by accurately positioning the needs of consumers in special periods, and pinpointing the business opportunities in the impact of the epidemic.
This time, the number of Uniqlo stores in China surpassed that of Japan for the first time. One can't help but wonder whether Uniqlo's approach is to use China to save its own market?
2. Will China bet on China as a life-saving straw for Uniqlo?
In fact, we have been tracking Uniqlo for quite a long time before. Uniqlo China, as the fastest growing part of Uniqlo, has been widely followed by Uniqlo. In mid-December 2018, Uniqlo announced that the number of stores in mainland China exceeded 660. In 2020, the number of stores in China will increase to 1,000, surpassing Japan. Now, 2020 is not over yet. Although the number of stores in China is not as large as the previously expected 1,000, it has achieved the goal of surpassing Japan. Then Uniqlo's approach How should I look at it?
First of all, the law of the jungle has always been Uniqlo's code of conduct .
When we analyzed Yanai Masa’s behavior, we specifically said that, unlike traditional old-school Japanese entrepreneurs who like to adopt life-long employment system, Yanai Masa can be said to have been deeply influenced by the evolutionary theory of "natural selection of materials, survival of the fittest". "The influence of "the life-long employment system" is something that does not exist here in Yanai Masao. He only believes in his own judgment, "Those who can't swim, let them sink." This sentence is always in Yanai Masao. According to this principle, Yanai Zheng never uses the so-called emotion to consider which country has more shops and which country has fewer shops. There is only one rule here, "The Law of the Jungle". If the store is well managed, If the store is not operating well, it will be closed directly.
Under the influence of this concept, one of Uniqlo's most characteristic market management methods is to announce all the number of stores opened and closed to the public. This time the announcement that China surpassed Japan is based on this model.
And we use the perspective of the law of the jungle, Japan has suffered a huge impact under the black swans that are currently sweeping the world. Although from the perspective of prevention and control, Japan’s results are better than those of the United States and European countries, but far inferior. In China, under such circumstances, Yanai Masao also resolutely put his focus on China and achieves the balance of his own industrial ecology through Chinese stores. This is actually a logic of "losing the East and reaping the mulberry", in other markets When bad times, find the market in China to make up, when the European and American markets are not good, make efforts in China and Japan. This is the logic of Uniqlo.
Secondly, it is Uniqlo's gameplay to play online and offline at the same time .
After talking about the importance of the Law of the Jungle in Uniqlo’s business, let’s look at how Uniqlo plays in China this time. Starting in June this year, Uniqlo has accelerated the pace of opening stores in the Chinese market, only in June and August. Nearly 30 new stores were opened in more than 20 cities. Among them, on August 14 alone, 19 new stores of the brand opened at the same time. In September, Uniqlo continued to expand its stores, opening 15 new stores. Uniqlo also has about half of its production bases in the Chinese market. Currently, of the 242 garment processing factories that the brand cooperates with, about 128 are located in the Chinese market.
At the same time, Uniqlo has not given up on the Internet market, and has been vigorously participating in the construction of China's e-commerce market. In 2016, Uniqlo realized the digital model of online ordering and offline pickup. Previously, from 2015 to 2019, Uniqlo ranked first in women's clothing sales in Tmall’s “Double 11” promotion, and it is not uncommon for Uniqlo’s flagship store to be sold short. Judging from current observations, Uniqlo is not only as simple as its offline market layout in China, but also a way of playing together online and offline, with the goal of truly expanding the Chinese market.
Third, Uniqlo's strategy of basic models is king is also very suitable for Chinese consumers .
In addition to the strategy of Law of the Jungle and China's online and offline expansion strategy, Uniqlo also has a gene that allows Uniqlo to blossom all over the country. This is the basic product of high quality and low price. We can find in Uniqlo that the price positioning of Uniqlo is not the inexplicable high price of MUJI, but the real low price with quality. Basically, the working class in a city can fully consume within their own purchasing power. Uniqlo clothing.
At the same time, 70% of Uniqlo's products are basic models. Basic models mean versatile. In addition, Uniqlo does not have the strong design sense of luxury brands. You can't even see the logo on its clothing. This low-key can To meet the needs of almost any level of consumers, since it is not the same style that ZARA sells popular, so no one will say that this is a cheap version of XX, and there is no trouble of hitting the shirt. In this case, you will I found a magical thing. Both men and women can use Uniqlo's clothing and their original clothing to match. The logic of the real white box is that Uniqlo can be popular in China's first and second tiers, or in the third and fourth tiers and even County areas and rural markets can be popular, and this is its essential gene.
It is indisputable that Uniqlo's vigorous development of the Chinese market is a very correct move. The internal circulation consumption momentum that has erupted in China is difficult to see in other markets. Uniqlo is truly committed to the Chinese market. This is what Uniqlo can achieve. The fundamental reason for the full-year business profit forecast and the recent forecast remains unchanged, and China's consumption power is also the key to driving Uniqlo to fight the impact of the cycle.
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