UNIQLO Continues To Expand Zara Is Threatened By Fast Fashion Giant.

UNIQLO boss set a new business growth target for the brand before retiring.

In an interview recently, chairman of the Xun marketing group, Liu Jing Zheng, said that in the next 2 years, the group's core brand, UNIQLO, will double the growth of e-commerce sales and increase the proportion of online sales to 20% to 300 billion yen (17 billion 400 million yuan).

According to the 2017 earnings report released by Xun marketing group, although the sales volume of UNIQLO online increased to 31.6%, its sales volume was 140 billion yen (8 billion 100 million yuan), accounting for 7.5%. It was only about 7.5% yuan for the rival Inditex group's fast fashion brand Zara online sales, which was about 330 billion yuan (19 billion 100 million yuan).

Ryui Masa further pointed out that in order to achieve this goal, two aspects will be pformed.

In terms of channels, UNIQLO will connect the global distribution channel with a new website. In addition to strengthening the basic product line, it will also sell exclusive single products online.

In addition, UNIQLO has announced that it expects to accelerate its Asia based overseas market in the current fiscal year.

Expand to achieve 20 stores in Europe, 40 in Southeast Asia and 100 in the Greater China market.

UNIQLO emphasized that by 2020, the number of branches in China will increase to 1000.

It is noteworthy that UNIQLO's first overseas market revenue in the first quarter exceeded Japan's market for the first time.

Last year, overseas revenues, including China, surged 29.2% to 507 billion 400 million yen (29 billion 700 million yuan), and operating profits rose 65.6% to 80 billion 700 million yen (about 4 billion 700 million yuan).

In the face of the global retail business is generally facing a crisis of shop closes, the trend of UNIQLO is actually to integrate online and offline channels to pave the way.

Uchida Fumio, director of global VMD of former UNIQLO, pointed out that UNIQLO wanted to set up a lower line picking mode under the online strategy.

Uchida Fumio pointed out that in Japan, consumers can store clothes delivered during the day to store in the convenience store near 24 hours, but it will not work in China.

Therefore, in the Chinese market, the expansion of the entity store will be synchronized with the electricity supplier. When the coverage of UNIQLO stores is high enough, consumers can return the goods on the spot if the size of the stores is not suitable.

This attempt to open up the closed loop of self operated electric business.

It not only guaranteed the brand's control of the channel, but also avoided the problem of the professional logistics service company.

UNIQLO did not attempt to cooperate with local electricity suppliers. In 2015, the brand announced that it would use three months to prepare Jingdong flagship store. Jingdong opened up 10 thousand square meters of exclusive warehouse for UNIQLO and made it the first international clothing brand to enjoy warehousing and "Da Da" service on Jingdong.

But at the end of the day, UNIQLO still needs to discuss and improve its withdrawal from the Jingdong ahead of schedule.

Okazaki, chief financial officer of XXX group, has said that the group has launched Ariake distribution projects and will soon be able to achieve the same day or next day by establishing new distribution centers in China and the United States.

The second step of UNIQLO digitization is to gradually access artificial intelligence to realize personalization.

At present, UNIQLO is testing the area through semi custom service. Since last September, Japanese consumers can pick out semi finished products in the shop, and then choose the size and color of clothing according to their preferences, including adjusting the styles and sizes of collars and cuffs.

Some analysts believe that customized services extend the possibility of product diversity at the lowest cost.

Because UNIQLO is mainly selling basic funds, its functional input makes the product fashion more popular than other fast fashion brands, but now consumers add personalized value-added products through UNIQLO design.

But for UNIQLO, it is more important to retain the body data of consumers as the basis for personalized recommendation and CMR (customer management relationship).

The service has been seamlessly linked to App, and consumers can complete it on mobile phones. UNIQLO said it will extend the service to the world.

Uchida Fumio said that behind its APP is the supply chain visualization "UNIQLO IQ" Ai tool.

When consumers complete customization, information is fed back to UNIQLO headquarters and gets information about goods, which means that consumers can see progress in the entire supply chain from production, sale and distribution.

In fact, the great investment in digitalization is inseparable from UNIQLO's persistent emphasis on practicality.

At the end of last year, Mr. Liu stressed that the clothing and life arts and science exhibition emphasized that the future clothing function is more important than fashion. He thinks that fashion trends will change over time, but it is possible to provide functional products from actual needs regardless of the trend.

This seems to be contrary to the practice of UNIQLO promotion in recent years. According to the fashion business express, its latest target has begun to involve luxury brands, and the holiday series launched by Bottega Veneta creative director Tomas Maier will be sold in brand stores and stores this summer.

Meanwhile, UNIQLO has also reached long-term cooperation with Christophe Lemaire, the original creative director of Hermes, and has regularly launched the "UNIQLO U" series.

But this intermittent cooperation does not mean that the brand's popularity can be improved qualitatively.

Take the Swedish fast fashion brand H&M, which pioneered designer joint mode, for example, its latest Erdem X H&M series originally wanted to get high fashion as a selling point at a fast fashion price, but no one was queued for half an hour because of the low popularity of the designer.

It is seen that there is a great deal of instability in this famous brand. Liu is announcing his retirement, stressing that young people must be responsible for the group's products to meet the youth's preferences.

At the same time, his successor also needs rich digital experience and can make new business judgement quickly according to market changes.

Facing the impact of consumption upgrading and new business mode, the traditional fast fashion brand is at the crossroads of pformation.

From 2014 to 2015, the cost of raw materials increased due to the depreciation of the Japanese yen and the cost of the foundries increased. XXX group raised the price of products in autumn and winter in July 2014 in July 2014 and 10% respectively in UNIQLO.

Two different levels of raising prices eventually led to a 6.3% decline in the number of customers in UNIQLO in the first half of the 2016 fiscal year, with a sharp decrease of 22.6% in annual profits. Ryui Masa had to admit that the strategy was wrong, and the group subsequently lowered its price globally by 30%.

The failure of raising the price strategy may be a major turning point for UNIQLO.

Japanese retail expert Chen Liping pointed out that the emergence of every retail giant appeared in the image of "price Destroyer".

The industry believes that compared with the comprehensive retailers, UNIQLO and others focus on the advantages of the subdivision area is quality, and in its field, compared with the head brand is lower than the price.

The peak period for the development of this kind of retail giant focusing on market segmentation is to reasonably balance the low price and high quality, but when this balance is broken, it means that the new "destroyer" appears.

Take the fast fashion field as an example, in fact, the ultra fast fashion Boohoo and ASOS have not jumped out of the fast fashion business mode, but it has changed the consumer's perception of "high quality and low price", that is, consumers can see that they can enjoy the same or similar products at a lower price.

In addition, the popularity of the Internet allows every individual to voice. The designer of a small brand can only be presented to consumers at a low cost of publicity. In addition, according to fashion headlines, there are a lot of complaints about the return of customers and new discontent in the fast fashion brand Zara micro-blog.

When consumers' eyes become more critical, fast.

The original "quality" advantage is also being overturned.

For UNIQLO, which relies on practicality, moving intermittently to fashion will bring surprises to consumers and stimulate consumption. But the most important thing is how to give play to the core competitiveness of commodities.

In announces last year's earnings report, the Xun group said that its growth was mainly due to the colder climate, HEATTECH, down jacket, fleece, warm pants and so on.

Sales in Greater China and South Korea are particularly strong.

Ryui Seiso said that UNIQLO is essentially a technology company whose rival is apple rather than Gap.

After the launch of HEATTECH heating material by Dongli high tech group in 2015, people in the industry may also produce products that use solar energy to generate heat, collect electrocardiogram and other body information, and change the color of the product after analyzing the two heating materials.

Dongli group said the technology is mature, but whether it faces the market is still confidential.

This means that in the future consumers can buy clothes made of first-class technology at the price of fashion products, and UNIQLO is updating consumers' perception of "quality".

In the general downturn of the retail industry, Ryui Masa will not only speed up his expansion, but also set the fastest goal for UNIQLO to reach 2 trillion yen (116 billion 100 million yuan) in August this year.

This may serve as a wake up call for fast fashion in the recent rush to push new brands and close shop layoffs. After all, consumers who can continue to capture consumers must be low-priced products, and the "destroyer" of UNIQLO will further threaten the status of Zara.