TakeAway: Looking to become the world’s leading clothing retailer, Uniqlo plans to move into the fast-growing Indian and Brazilian markets and to vastly expand its presence in China, where the number of stores are intended to leapfrog those in Japan by 2020.
The retailer quickly is becoming a template for the rest of corporate Japan, faced with the twin obstacles of shrinking domestic demand and a dearth of Japanese leaders with the know-how and language skills needed to lead a push into global markets.
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Excerpted from WSJ, “Uniqlo Plans for a Global Push” By Mariko Sanchanta, December 20, 2010
Fast Retailing’s fashion focus, however, is different from its competitors (e.g. Zara and H&M): It sells casual, affordable basics, such as fleece jackets, jeans and its Heat Tech line of thermal underwear. "We don’t make clothes that you throw away after one season."
In its home market, where Fast Retailing derives the bulk of its revenue, the company has caused a buzz by breaking with many of the conventions of Japanese businesses. Fast has said English must be spoken at all business meetings where foreigners are present, that all email correspondence must be written in English by 2012 and that the number of its foreign employees will overtake Japanese workers by 2015.
"Our advantage is that we are a Japanese brand, which is known for good quality and design, and we are closer in proximity to the Asian countries."
"In China, we will grow organically without alliances or collaborations. There are no Chinese companies that can do a better job there than us. . . . We won’t be striving to increase our store count in Japan by that much going forward."
Uniqlo is forecast to have 844 stores in Japan and 76 in China by the end of August. By 2020, Uniqlo aims to have 1,000 stores in China through organic growth alone. Zara had 60 stores in China as of Oct. 31.
Analysts said that with more than 800 stores in Japan, the market is saturated and consumers are reining in their spending. "Overall purchase sizes [in Japan] have been going down, but Japanese consumers have been increasing the frequency of their visits to stores in some categories. People want to spend less on each visit," said Brian Salsberg, head of McKinsey & Co.’s retail-and-consumer group in Japan.
The company admits that it still has a lot to learn, particularly from rivals. "We can learn from H&M and Zara by looking at the speed with which they launch new stores. They are very courageous to open new stores, whether they succeed or not. We, in contrast, are very cautious with what we do," he said.
Edit by AMW
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Full Article:
http://online.wsj.com/article/SB10001424052748704368004576028453572446140.html
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