Taobao women's clothing spring wear

by wgyuvs8a on 2012-02-27 21:01:22

Uniqlo: Online Flagship Store Opens for 10 Days, Becomes Top Seller on Taobao

Pan Ning, the General Manager of Uniqlo China, is very sensitive to numbers. During interviews, he stepped away several times to check his computer, saying, "I need to confirm whether these contents can be made public." In the topic of Uniqlo's cooperation with Taobao to establish an online shopping platform, Pan Ning's caution is particularly evident.

Regarding the online sales volume, Pan Ning did not give a direct answer but instead said indirectly, "The online flagship store has been open for 10 days, and its sales have become the top among all shops on Taobao. Buyers come from almost all provinces, municipalities, and autonomous regions across the country, making up for the insufficient rapid expansion of Uniqlo's physical stores."

The slow increase in the number of stores has been one of the main issues troubling Uniqlo in recent years, and it is also an important reason for Uniqlo's cooperation with Taobao.

Uniqlo entered the domestic market in 2002. By 2005, the number of stores nationwide was 9, including 7 in Shanghai and 2 in Beijing. Due to unsatisfactory performance, the two stores in Beijing were closed that year, and resources were concentrated on the development of the Shanghai market. Regarding this setback, Pan Ning believed that the reason lay in Uniqlo's inaccurate positioning of the Chinese market, hoping to crush competitors through price wars, but the actual situation showed that such a strategy was not successful.

Starting from 2005, Uniqlo began to adjust its competitive strategy in the Chinese market. Uniqlo shifted from emphasizing selling clothing products that everyone could wear to focusing on the versatility of its products. The target audience was the urban middle class who didn't closely follow fashion trends, highlighting the characteristics of easy purchase, high cost-performance ratio, and easy matching. Pan Ning said, "After such adjustments, Uniqlo found its own path. From 2006 to 2008, Uniqlo's turnover in the Chinese market increased sixfold, and profits increased tenfold."

Uniqlo accelerated the replication of its experience gained in the Shanghai market nationwide. By April 2008, the number of directly operated stores domestically was 11. By the end of May this year, the number of stores had increased to 30. However, compared with competitors, this number is still too small. Giordano (00709.HK) had 909 stores domestically in 2008, an increase of 89 stores compared to 2007.

H&M is one of the most powerful competitors in Pan Ning's mind. H&M entered the Chinese market in 2007 and opened 7 stores that year. In 2008, it added another 6 stores, reaching a total of 13 stores in just two years. It took Uniqlo almost six years to reach the same level.

Besides the slow expansion of the number of stores, large areas of the domestic market are still blank for Uniqlo. Pan Ning introduced that Uniqlo stores are mainly concentrated in Shanghai and its surrounding markets. First-tier cities in the country have yet to be fully covered, and smaller cities are yet to be developed. How to develop in the Chinese market remains a problem that Uniqlo needs to carefully consider.

Tadashi Yanai, Chairman of Fast Retailing Co., Ltd., the owner of the Uniqlo brand, stated that by 2020, Fast Retailing aims to become the leader in the apparel retail market. Compared with competitors, this goal is extremely challenging. Data provided by Fast Retailing shows that in the fiscal year 2008, Gap Inc.'s sales in the U.S. were 1.7 trillion yen, Zara ranked second with sales of 1.5 trillion yen. H&M ranked third with sales of 1.3 trillion yen, while Uniqlo ranked sixth with sales of 58.64 billion yen.

One of the main supports for Uniqlo's business growth is the Chinese market. Pan Ning once expressed that the potential of the Chinese consumer market is ten times that of the Japanese market. However, potential and tangible sales figures are not the same thing. According to Uniqlo's 2008 annual report, the annual sales of Uniqlo-branded clothing in the Japanese market were 462.3 billion yen, while the international market, including mainland China, Hong Kong, and South Korea, had sales of only 29.3 billion yen, accounting for only 6% of the Japanese market.

The expansion speed of physical stores, combined with online sales channels, is Uniqlo's new growth strategy.

Online sales are not unfamiliar to Uniqlo. Uniqlo's online sales platform in Japan has long been established and operates well.

However, how deep the waters of the online sales market in China are, neither Pan Ning nor Tadashi Yanai knows for sure. Pan Ning said, "My first online shopping experience was after Uniqlo's flagship store on Taobao opened. I bought a product from a competitor online."

Original article source: Uniqlo Taobao flagship store, women's spring and summer clothing on Taobao.

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