TMTPOST–Uniqlo, founded by Japanese billionaire businessman Tadashi Yanai, has always aimed to offer customers high-quality casual wear at affordable prices, like buying a magazine at a newsstand. This vision has propelled Uniqlo from a small clothing store into a globally recognized fashion giant.

However, recent financial reports from Uniqlo's parent company, Fast Retailing, showed mixed performance in the Greater China region. In the first three quarters of fiscal year 2024, the region generated revenue of 522.469 billion yen (US$3.41 billion), accounting for 22.1% of its total revenue. Despite this significant contribution, the third quarter saw a decline in revenue and a substantial drop in operating profit in Chinese mainland and Hong Kong, along with shrinking same-store sales.

Pan Ning, CEO of Uniqlo Greater China, attributed this to a shift in Chinese consumer attitudes toward cost-effective alternatives. "We see a consumption value centered on 'affordable alternatives'—consumers choose more affordable products that are nearly indistinguishable in quality from brand-name goods," he said. He also noted a growing interest in products that are reliable, comfortable, easy to maintain, and suitable for both everyday wear and sports.

Pan believes this shift aligns with Uniqlo's strengths. "We offer simple, high-quality, basic clothing for all ages that can be used for both sports and daily wear. With changing consumer sentiments, Uniqlo's relative competitiveness is actually increasing. We believe Uniqlo has the potential to become the top choice for consumers in Chinese mainland."

Despite this, the company is facing the challenge of being substituted by more affordable options. Some consumers noted that while Uniqlo is not expensive, the robust clothing supply chain in China makes it easy to find similar quality products at lower prices.

Founded in 1984, Uniqlo has grown from a small shop into a household name, becoming a classic example of successful business management. During Japan's economic slowdown in the 1990s, Uniqlo and Muji rose rapidly by offering high-quality, cost-effective products while de-emphasizing their brand names. Thanks to Fast Retailing's global strategy, its overseas market growth surpassed that of Japan.

Fast Retailing's financial report shows that for the first three quarters of fiscal year 2024, the company's total revenue reached approximately US$150 billion, a 10.4% increase year-on-year, with a total operating profit of around US$25.5 billion. Uniqlo's revenue in Japan during this period was about US$46 billion, while overseas revenue stood at US$82 billion, nearly twice that of Japan.

From March to May 2024, Uniqlo's revenue in Greater China declined, with a sharp drop in profits. Pan cited several external factors, including a strong performance in the Chinese market last year and decreased consumer purchasing desire this year, along with abnormal weather events. Additionally, fierce competition among shopping malls has led to disparities in each store's ability to attract customers.

Internally, Uniqlo faced challenges in meeting customer needs and adapting to regional climates. Approximately 150 stores struggled to attract customers, thus dragging down overall monthly averages.

Despite a market share of just 2% in China, Pan remains optimistic about Uniqlo's growth potential. "Uniqlo has a 94% brand awareness in major markets in Chinese mainland, with 84% of respondents having purchased Uniqlo products at least once."

To boost sales in China, Fast Retailing plans to adjust its store strategy, focusing on quality over quantity. Over the next three years, Uniqlo plans to close or renovate about 50 stores annually, opening large stores in better locations while renovating existing stores in prime shopping centers to increase their sales by more than 1.5 times.

In addition to store adjustments, Uniqlo aims to expand its online presence by increasing live-streaming sales. Pan noted the popularity of live-streaming featuring store staff and is currently training about 2,000 staff members for live broadcasts from all stores.

Moreover, Pan mentioned Uniqlo's long-term cooperation with many factories in Chinese mainland, aiming to streamline the "made-and-sold" process, though this requires tailoring product lines to meet local demands.