Market Analysis of UNIQLO

This article provides a detailed analysis of UNIQLO, including its history and evolution, challenges and solutions, company goals, future challenges, and the number of UNIQLO stores worldwide. UNIQLO is a well-known Japanese casual wear designer, manufacturer, and retailer that operates in Japan and many other countries. The company aims to become the world's biggest specialty retailer of private label apparel with a nonstop growth rate of 20% per year. However, the company still faces major challenges as it aims to achieve its 2020 goal, especially in the North American market.

The Market Analysis of UNIQLO
History and evolution: Tadashi Yanai, CEO and founder of Uniqlo, grew up in the retail
clothing industry. He was born in 1949 to a suit shop owner in Yamaguchi, Japan, and
eventually his father is having a chain of 22 stores where he became president in 1984. When
he took over the presidency, he opened a store called “Unique Clothing Warehouse,” which
was later summarized to "Uniqlo," in Hiroshima. In the beginning Uniqlo was a typical multi-
brand shop having Nike, Adidas, and other foreign brands. Uniqlo Co., Ltd. is a well known
Japanese casual wear designer, manufacturer and retailer. This company operates especially
in Japan and many other countries and it has been wholly owned subsidiary of Fast Retailing
Co. Ltd. From the research we have found out the whole process about how it begins and
make its journey the most successful one.
In order to guide the company through the realization of this strategy they engaged the retail
brand consultancy, The Brand Architect Group, including consultation on merchandise,
visual merchandising and demonstration, store design and a new logo designed by Richard
Seireeni and Sy Chen of The Brand Architect Group's Los Angeles office. China has
availability of cheap labourers, so Uniqlo had begun outsourcing their clothing manufacturing
to factories in China and it proved a well-established corporate practice.
In the beginning Japan was in the depths of recession, but because of low-cost its goods
became popular. Apart from that the clothing quality, new retail layouts and their advertising
campaigns also proved fruitful. In November 1998, their first urban Uniqlo store was opened
in Tokyo's trendy Harajuku district, and its outlets quickly spread to major cities all over
Japan. In 2001, both sales turnover and gross profit reached a new peak, with over 500 retail
stores in Japan. Uniqlo separates from the parent company when it has decided to expand
overseas, and established Fast Retailing (Jiangsu) Apparel Co., Ltd. in China. In 2002 their
first Chinese Uniqlo outlet was opened in Shanghai alongside four overseas outlets in
London, England.
In creating its clothing lines, Uniqlo embraces shun and kino-bi both. Shun means 'timing,
best timing, but also at the same time it’s about trend, something that should be updated and
just in time, neither early nor late. Kino-bi means utility and beauty, which if joined together
means that the clothing should be presented in an organized and rational manner, and that
incredibly organization and rationality creates an artistic prototype and rhythm. These virtues
reflects the features of modern Japanese traditions, modern 'Japaneseness.' In 2005 overseas
expansion takes place, with stores opening in the United States (New York City), Hong Kong
(Tsim Sha Tsui) and South Korea (Seoul), their South Korean expansion being part of a joint
venture with Lotte. As year 2005 comes to an end, Uniqlo had around 700 stores within Japan
along with its overseas holdings. A design consulting contract for Uniqlo products is signed
by Fast Retailing with fashion designer Jil Sander in March 2009.
On September 2, 2009, Fast Retailing Co., Ltd. pre-tax profit from operations of 1 trillion
yen and announced that the company would target annual group sales of 5 trillion yen by
2020. This indicates that the company is aiming to become the world's biggest Specialty
retailer of Private label Apparel with a nonstop growth rate of 20% per year. The number
breaks down as one trillion yen from Uniqlo's Japan business, three trillion yen from its

international business, and one trillion yen from "Japan-related and global brand business.
The company's international business target breaks down as one trillion yen in Europe, one
trillion in other Asian countries and one trillion in China and the United States.
Challenges and solutions:
Uniqlo offers very high quality products at reasonable prices for a huge target customer base
and its value offer reflected in the company’s dictum “Made for all”. Its main aim is to
maintain the company’s competitive advantage while driving towards this goal and hence it
seriously works on its management structure and its cost control and production processes.
Uniqlo has focused on using their technology and cost in most efficient manner and making
it’s clothing unique to the customer.
Company Goals:
Though a solid start, Uniqlo’s recent success in the US market is only one step away from its
goal of being the number one apparel company in the world by 2020. Although Uniqlo
executives consider that the US is decisive in accomplishment this objective and that they
must be number one in the US market which helps them to become global number one. In
pursuit of this, the company has set the standard of attaining a market share of $10 billion
USD in the United States and $50 billion USD worldwide by 2020.
Future Challenges:
The company’s whole success and expansion, based on its unique business model and its
initiatives to create a distinctive brand name, has been irresistible, Uniqlo still faces major
challenges as it aims to achieve its 2020 goal. The company’s success depends on its
performance in the North America market, and especially in the US market. And it is
particularly this market that accentuates the most significant challenges Uniqlo has to deal
with.
Number of Uniqlo stores:
FY 2014 2013
Unit stores End August Open Close Eng August
UNIQLO JAPAN: 852 54 55 853
Directly Operated 831 51 54 834
Large-scale 199 26 4 177
Standard 632 25 50 657
Franchise 21 3 1 19
UNIQLO International: 633 193 6 446
China 306 83 2 225
Hong Kong 22 5 1 18
Taiwan 46 9 0 37
South Korea 133 31 3 105
Singapore 18 6 0 12
Malaysia 21 11 0 10
Thailand 20 10 0 10
The Philippines 16 10 0 6
Indonesia 4 3 0 1
Australia 1 1 0 0
U.S. 25 18 0 7
U.K. 10 0 0 10
France 6 3 0 3

Russia 4 2 0 2
Germany 1 1 0 0
Global Brands: 1268 152 34 1150
Miscellaneous 1485 247 61 1299
Total 2753 399 95 2449
Terminologies:
 FY – Financial year
 CEO – Chief Executive Officer: it is the highest grade executive in a
company, their main activities includes making important corporate
decisions, managing overall working of the company and acting as an
intermediate between the board of directors and corporate operations.
 Multi Brand Shop – It refers to a company which operates the store
shops of multiple brands belongs to various manufacturers.
 Recession – A period of economic decline, it is temporary in nature.
 Outsourcing – It is a business practice in which tasks are performed by
another company or an individual hired by the company.
 Gross profit – Profit of the company which is computed by taking direct
income and expenses of the company
 Parent Company – The company that controls management and operation
and that owns enough voting rights to influence board of directors.
References
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