Uniqlo China Rapid Expansion: Opens World's Largest Flagship Store in Shanghai
"Uniqlo" may change its brand strategy in China, no longer emphasizing good quality at low prices as it does in Japan, but instead aiming for mid-to-high-end development.
The casual wear brand "Uniqlo," owned by Japan's richest man, Tadashi Yanai, might alter its branding strategy in China to focus less on affordability compared to its approach in Japan and aim towards mid-to-high-end markets. Yanai has expressed his ambition to become the global leader in casual wear retail.
"Uniqlo," which is wildly popular in Japan and can be called the "national clothing," plans to open its largest flagship store worldwide on Nanjing Road West in Shanghai in mid-May, thereby fully initiating its ambitious expansion plan in China.
Yesterday, Eiichiro Shimajima, the publicity director of Uniqlo's parent company Fast Retailing, revealed to Yicai Global that there will be a press conference in Shanghai on April 7th to introduce the details of this store located at the intersection of Nanjing Road West and Maoming Road North. The three-story Uniqlo flagship store will have an operating area of approximately 3500 square meters, surpassing the scale of global flagships in New York, London, and Paris.
In fact, this is just the beginning of Uniqlo's expansion strategy in China. By the end of February 2010, Uniqlo had opened 59 stores in 14 cities across China including Beijing, Shanghai, Guangzhou, Shenzhen, and Hong Kong. It is understood that they will soon open 100 stores in China with an average size exceeding 750 square meters, and within the next five years, the number of directly operated stores could exceed 300.
Like many clothing brands, Uniqlo also favors the "good quality at low price" textile and garment workers in China, with 85% of its products manufactured by cooperative factories in China. Shimajima mentioned that Uniqlo currently collaborates with 70 companies in China, but estimates that competitors like Zara should have around 1000 partners, so they are also preparing to expand production in China.
Fast Retailing Group (stock code: 9983) was listed on the Tokyo Stock Exchange main board in 1999. Last year, its total sales reached 685 billion yen (7.4 billion USD), with an operating profit of 101.3 billion yen, and a market capitalization exceeding 1.6 trillion yen (17.3 billion USD). Its president, Tadashi Yanai, has thus been named the richest person in Japan by Forbes for two consecutive years.
Recently, Yanai declared in an internal magazine his ambition to become the world leader in casual wear retail (currently ranked fourth, behind Zara, Gap, H&M, and Limited Brands), aspiring to become a truly globalized apparel retailer. This is the ultimate goal of Fast Retailing Group. To realize this global dream, Uniqlo started an almost barbaric expansion from 2001. In 2001, it opened its first overseas store in the UK. Since then, it has successively opened stores in Hong Kong, South Korea, the United States, and France, and established global flagship stores in New York's SoHo district in 2006 and London, UK in 2007.
However, Uniqlo's globalization path can only be considered to have just begun. Last year's financial report showed that domestic sales of Uniqlo accounted for 78.6% of Fast Retailing Group's total sales, while overseas sales of Uniqlo only accounted for 5.5%. That is to say, consumption within Japan alone supports this world's fifth-largest casual wear brand, and several years ago, Uniqlo's popularity in China seemed not to match Muji.
This current situation, for Uniqlo, is less regrettable than invigorating, because it also means greater room for development. "Our sales target is to reach 5 trillion yen by 2020, with overseas markets reaching 3 trillion, the Japanese market 1 trillion, and other businesses 1 trillion." Yanai's confidence remains unwavering.
The remaining question is whether Chinese consumers will buy into this reputedly best-quality affordable brand.
Related articles:
http://wskqrs427.blog.stcn.com/archives/2012/430282.html
http://blog.cnfol.com/wgyvus6m/article/78703263.html
http://hi.baidu.com/wgyvus4w/blog/item/ba5a1f3de0dc85e199250ac6.html