Uniqlo (優衣庫), in response to the decline in the mainland China market, is striving to expand its overseas market. Not only is the company opening more stores in Europe and America, but it is also recruiting future management talents in South Asia and Southeast Asia, while accelerating the development of its store network in those regions.
According to the financial report of Uniqlo’s parent company Fast Retailing in the 2023 fiscal year (ending in August 2023), the sales revenue per store in the Greater China region was 600 million yen (including e-commerce), which is only about half of that in Japan (1.1 billion yen). Uniqlo’s revenue and profits in North America and Europe have significantly increased, and its performance in Southeast Asia, India, Australia, and Korea continues to improve. The domestic market in Japan also shows strong performance.
Noriaki Koyama, Chief Consultant and Head of Human Resources Strategy at Fast Retailing, Uniqlo’s parent company, mentioned in an interview with Nikkei Asia that the company’s accelerated recruitment in South Asia and Southeast Asia is a “real necessity.” He added, “These regions have tremendous development potential, and we can find very talented individuals there.”
Fast Retailing is rapidly expanding its store network in Southeast Asia and South Asia. As of February, the company had 367 stores in these regions, including Oceania, a 14% increase from the 323 stores in 2023. In 2022, the company had 281 stores in the region.
In October last year, Uniqlo opened a new store in a large shopping center in Mumbai, India. Fast Retailing stated in its latest financial report that the company “continues to maintain strong sales momentum.”
In the 2023 fiscal year ending in August, Fast Retailing recruited approximately 1,100 new graduates globally, with over 700 taking up positions overseas.
Koyama stated, “As a global company from Japan, we are deeply influenced by Japanese society and culture,” and therefore, they need local employees who understand Japan’s customer-centric philosophy.
In mainland China, the economic slowdown leading to weak consumption is a major negative factor Uniqlo is facing.
On July 11, Pan Ning, Chief Executive Officer of Uniqlo Greater China, mentioned in a press conference, “About 150 stores are located in areas with lower monthly sales and difficulty attracting customers.”
As a response, Uniqlo is implementing a “demolish and rebuild” policy in mainland China. While demolishing underperforming stores in the mainland, Uniqlo plans to open 50 to 80 new stores annually in the Greater China region, including Hong Kong and Taiwan.
Pan Ning highlighted that consumers are more focused on value for money, especially young consumers. Therefore, Uniqlo will change its store strategy in the Chinese market from a net increase of 50 to 80 stores annually to a net decrease or renovation of 50 stores per year in the coming three years.
Overall, despite the sluggish demand in mainland China, Uniqlo’s annual revenue performance remains solid. Fast Retailing stated that the global consolidated revenue target for the current fiscal year (September 2023 – August 2024) has been revised from the initial estimate of 3.03 trillion yen to 3.07 trillion yen.