How Japanese clothing brand Uniqlo aims to be No.1 in the world

How Japanese clothing brand Uniqlo aims to be No.1 in the world

PUBLISHED: 02 OCT 2013 19:49:00 | UPDATED: 03 OCT 2013 08:33:39

The Australian Financial Review

BY SUE MITCHELL

Uniqlo local chief Shoichi Miyasak says: “Our objective is to become the world number one by year 2020 – in order for us to meet that level, becoming the number one in Australia is a thing we have to do.” Photo: Nic Walker

Fast Retailing’s Uniqlo brand is so ubiquitous in Japan that one in four Japanese are estimated to own its trademark down jackets and wearing the brand even has its own word – unibare. Uniqlo may never become a household name in Australia, but its local chief, Shoichi Miyasaka, wants the brand to become the market leader in casual wear – overtaking long-established brands such as Just Jeans and General Pants as well as newcomers such as Top Shop – as part of Fast Retailing’s goal to become the world’s leading clothing company.“Our objective is to become the world number one by year 2020 – in order for us to meet that level, becoming the number one in Australia is a thing we have to do,” Mr Miyasaka told The Australian Financial Review. “When people think about casual apparel we’d like to be their first choice.”

Uniqlo has learned many lessons since it was forced to temporarily pull out of the British market after an unsuccessful launch in 2001.

In a recent interview with the Financial Times, Uniqlo’s founder, Tadashi Yanai, who is now Japan’s richest man, said the first London stores were messy and customer service left a lot to be desired.

LESSONS FROM LONDON

“The experience we had in London taught us very much,” said Mr Miyasaka. “We have established global standards for store operations and production, so in every new country where we start a new business it needs to be in line with our global standards.”

Uniqlo was attracted to Australia by the same characteristics that have lured global chains Zara and Top Shop – cashed-up consumers craving something new. “Australian people are first of all very keen to see something new and at the same time they can spend whatever they really want to spend, so this market is pretty deep,” says Mr Miyasaka, who is encouraged by the strong sales achieved by Top Shop and Zara since they opened their doors two years ago.

”We think this market is pretty huge and there’s great potential to grow.”

Uniqlo has been opening about one store every week as part of its global expansion plan and now has more than 1300 stores in 14 countries, with global sales exceeding ¥770 billion ($8.4 billion) in 2012.

Its first Australian store – a four-level flagship spanning more than 2000 square metres – is due to open in Melbourne’s Lonsdale Street in March or April and the company is looking for high-profile locations in Sydney.

Property sources say Uniqlo is looking for as many as 25 local sites, which will eventually be augmented with an online retail offer.

“We haven’t mentioned any numbers but we would like to be the number one in this country, so we have to be sizable,” Mr Miyasaka says.

“We’d like to be number one in dollar sales but we have to be the most respected company for the customers and at the same time for the employees’ point of view,” he said.

Uniqlo Australia CEO Shoichi Miyasaka has set himself a massive challenge to make the label Australia’s number one brand.

Uniqlo’s strategy is not to compete on fashionability but on quality, functionality, innovation, affordability and customer service.

The business has a vertically integrated private label model and it usually takes more than 12 months for products designed in-house and manufactured in China and other Asian countries to reach the shelves. This compares with lead times of three weeks to three months for most “fast-fashion” chains.

Uniqlo sells basic apparel such as jeans, T-shirts, jumpers and jackets but is best known for its cashmere knits – thanks to a long-term contract with the world’s largest cashmere factory – and its functional “innerwear”, made from fabrics designed to capture body heat or regulate air circulation. Mr Miyasaka says Uniqlo is still working on its local pricing strategy but is aiming to price as closely as possible to its global prices after taking into account exchange rates, duties and higher rent and labour costs.

Ferrier Hodgson retail partner James Stewart has few doubts that Uniqlo’s local entry will be a success.

“They have a very strong value proposition and their international expansion appears to be on track – it would be reasonable to assume they’ll make a very good fist of the Australian market,” said Mr Stewart.

“It all comes down to execution but that’s where the Japanese are normally very good – they have a great eye for detail and the quality of their product is good.”

Mr Stewart says Myer, David Jones, Target and BIG W – rather than specialty stores – have the most to lose from Uniqlo’s arrival.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: