UNIQLO SYNDROME: The trigger that messed up the market
Uniqlo, which is a famous fashion brand in the world and is a competitor of famous brands such as Zara and H&M, was officially present in Vietnam for the first time at the end of 2019. In addition to the praises about this brand, Uniqlo was once said to have led to Japan’s economic recession!
The background for Uniqlo’s triumph is the deterioration in consumption culture.
Owing to the “economic bubble” that took place in Japan and the repercussions of the Lehman shock, in 2009, the income of the middle class declined more than 15% compared to that of previous years. Consequently, the fund each household spends on apparel, which accounts for the majority of department store sales, has also shrunk by two-thirds between 1997 and 2009.
Faced with such a severe diminution in sales, rather than solving the problem of high costs, department stores raised prices beyond the ability of consumers with a view to maintaining profits. This accompanied by the consequences of the Lehman shock has made the business situation of these “big guys” increasingly degenerate. It can be said that the failure of the department stores is a testament to the economy falling into recession and the declining consumer culture in Japan.
One of the ways to help brands get out of that situation is: dumping. As a result, the system of outlet stores or stores that consume inventory was expanding and developing, which brought more pressure on ordinary retail stores and maintained a vicious circle.
To be more specific, the key for Uniqlo’s success is:
Economic Recession: The economic crisis in the 90s and early 21st century in Japan made consumers have a low-priced taste in clothes, leading to a decline in consumer culture.
Youth’s trend: the emotions of young people were suppressed. The arrival of “fast fashion” makes young people pay less and less attention to the quality of goods, but only to the design.
The Japanese economic downturn cannot be attributed entirely to Uniqlo, but it cannot be denied that Uniqlo has been the pioneer of the low-cost apparel wave.
The price competition coming from the market takeovers of the previous companies caused revenue and profit decline, creating a volatile, risky and unstable market for new entrants in Japan. The root of this situation is the massive adoption of Uniqlo’s successful method as well as Uniqlo’s importation from shopping malls and department stores. This created the influence of the Uniqlo wave, also known as the “Uniqlo Syndrome”.
The core that makes Uniqlo’s success.
Aeon, Ito Yosado, Jeans Mate, etc. failed to participate in this war because they did not understand the important points of Uniqlo’s method. These brands also make cheaper products with good quality, but ignore two things that are core to Uniqlo’s success:
Various segmentation, High quality, Low price
Uniqlo carefully analyzes the needs of the market, offers high-quality products at low cost and does not limit customers. Uniqlo does not follow fashion trends but has its own unique products and focuses on product quality. Ignoring the fast paced fashion world, Uniqlo can bring simple, convenient products with higher quality and cheaper than other brands. Yanai Tadashi, founder of Uniqlo, said: “In the apparel industry, suit is synonymous with fashion, and a lot of the typical consumer can afford it. If you offer quality products at a reasonable price to become a part of your customers’ lives, your market can expand without limits.”
Unique strategies
Uniqlo offers specific strategies to promote sales and business campaigns for each product type. Instead of mass-producing low-priced products, Uniqlo’s products have their own characteristics whereby advertising and communication campaigns are also created for each product type.
From “Uniqlo Syndrome”, Mr. Kensuke Kojima gives us an overview of the Japanese market, the Uniqlo brand, its development strategy over time, and the secrets of bringing this brand to dominate the fashion market which has increasingly become competitive.
SaiGon, 14.7.2021, Le Quynh Anh
