UNIQLO'S Helplessness: Re Embrace Low Price Strategy

August, Uniqlo

Sales in Japan's domestic market have weakened again, the parent company.

We are accelerating the layout of overseas markets to make up for the weakness of domestic demand.

Today, the group launched a landmark move in Singapore and opened the Uniqlo flagship store in Southeast Asia, the founder, chairman and chief executive officer of Tadashi Yanai, Liu Chi Jing, who is the largest flagship store in Southeast Asia, and raised the goal of raising sales to Southeast Asian countries to 30% in 5-10 years.

Uniqlo UNIQLO's largest flagship store in Southeast Asia is located in the central city of Orchard Central, Uzbekistan, on the main shopping mall in Singapore.

The three storehouse of 2700 square meters is the twenty-fifth store that the brand has been stationed in Singapore for 8 years.

Taku Morikawa, the chief executive of Southeast Asia, pointed out that Singapore is chosen because it is the center of Southeast Asia. Liu well is describing the country as the gateway to South Asia and Western Asia. Therefore, Taku Morikawa said that if the flagship store is successful, the brand will continue to explore important markets such as India and Vietnam.

In Southeast Asia, Uniqlo has 130 stores and only 1/4 of China's 467 stores. Thailand, Malaysia and Philippines account for about 30 stores in the region.

In order to increase sales in Southeast Asia and international markets, or even gain more market share from the world's two largest apparel retailers, Inditex SA (ITX.MI) and Hennes & Mauritz AB (HMb.ST), maintaining low prices is the key. Tadashi Yanai Liu Yi Jing pointed out in Singapore's opening activities on Thursday, especially in the current severe retail environment.

However, it is just Ryui Masa's helplessness to embrace the low price strategy again.

In 2015 Uniqlo UNIQLO tried to raise prices, but with the loss of customers and the decline in sales, the Japanese richest man had to go back to this old road, "at the lowest possible price, to provide real quality clothes," he said in Singapore.

Returning to the domestic market, due to the cooler weather in the first half of the month and the impact of Typhoon on the middle of the month, the sales of the same store in the Uniqlo store in UNIQLO in August recorded a 1% decline, of which the slight increase of 0.6% of the passenger price was difficult to offset the 1.6% decrease in the number of customers.

Total sales of e-commerce include a slight increase of 0.2%.

Fast Retailing Co. Ltd. (9983.T) on Friday reported 35700 yen, down 0.67% from the whole world, and the stock has fallen by 16.3% so far in 2016. But since July 14th's three quarter results, the stock price has risen 29.1%.

In the three quarter, the sales and profits of the group as a whole and flagship brand Uniqlo & amp; UNIQLO were significantly warmer than those in the first half of the year. Such a signal allows investors to choose to ignore the profit pressure generated by the yen appreciation on 37% of the group that sells overseas markets.

Uniqlo's development ambition in the largest overseas market, China, is indeed Sima Zhao's heart.

Ryui Masashigeshen adds 100 stores a year to 3000 stores in China.

At the same time, Ryui Masa still hopes that the brand can conquer the North American market with a high strategic position but has been frustrated.

Last week, Fast Retailing Co. Ltd. group announced that Uniqlo will be officially entering the second Canadian market in North America at the end of September, which is the eighteenth regional market of the brand.

Since its opening in the SoHo District of New York in 2006, the brand has been developing for ten years, and there are only 44 stores in the North American market.

What is more, US business profitability is worrying and has been in a state of loss.

In the fall of 2014, Uniqlo's UNIQLO built 18 new stores in the United States, and weak sales and high operating costs put great pressure on the group.

To save money, the brand has closed 5 stores in the suburbs of California, Connecticut, New Jersey, Pennsylvania and New York Staten Island since January.

Ryui Masa pointed out last year that brands are well penetrated in big cities like New York, San Francisco and Chicago, but not in the suburbs.

For stores, brand spokesmen emphasize that the United States is an important market and will change strategies to open large stores in big cities.

In the first nine months as of May this year, the US Uniqlo UNIQLO UNIQLO has made progress in rectifying its business. After the adjustment of the inventory level, the gross profit margin has improved and the operating expenses ratio has improved. Therefore, the operating losses in the period narrowed compared with the same period last year.

Today, in addition to the flagship store in Singapore, there are also the Uniqlo stores in New York SoHo district.

The three floor 28000 square foot flagship store has been repacked to infiltrate the brand awareness of Uniqlo A in a more localized perspective and appearance. For this brand, the brand also set up a theme entitled "A New Tokyo in Soho (New Tokyo in Soho area)".

SoHo flagship store has set up 6 main shops, including clothing, underwear, functional sportswear, Supima cotton products and so on. One of them is called "Tokyo magazine stand", which provides a total of customers in Japanese fashion, design and lifestyle magazine.

The brand also points out that it will cooperate with stores, restaurants and non-profit organizations in the future to carry out activities and provide promotions.

Ryui Masa revealed that the expansion of the US in the future will seek opportunities in the special West Bank because it is regarded as an extension of Asia.

Hiroshi Taki, the chief executive of Uniqlo UNIQLO, points out that the brand is still lacking in popularity. Especially in the suburbs, even if people know the brand of Uniqlo, New York, but most of them do not consume, there will be only 4 new stores this year, and New York will be at the top level, because as long as New York is successful, the success of other places will follow.

In order to solve the problem of popularity, Uniqlo UNIQLO opened guerrilla stores in New York and sold advertisements with billboards. It also used net red and local red people to make more people familiar with the brand.