- CSR TOP
- Social Business
The cycle of poverty continues in Bangladesh, where many children cannot attend school and sanitary conditions are generally poor. In the face of these severe challenges, UNIQLO is engaged in a social business. We have created a complete supply chain within one of the world’s poorest nations, from production to sales. The new businesses generated from these links can help to lift people out of poverty, so they can become economically self-reliant. The availability of clean clothing, meanwhile, plays a role in improving sanitary conditions and encouraging children to attend school. While volunteer and donation efforts can provide mainly material support, our social business gives people the opportunity to improve their lives on their own. It has been about one year since the September start of our social business. Although our challenges to the new business were greater than we had expected, partners who share our goals are steadily jumping on board to give us a hand. And we believe the power of clothing will open the way to a brighter future in Bangladesh.
The Many Facets of UNIQLO’s Social Business
UNIQLO launched a social business in the People's Republic of Bangladesh in collaboration with Grameen Healthcare Trust of the GRAMEEN Bank Group. We produce the truly great clothes, and sell them at prices affordable for everyone and all profits are reinvested in this social business. The business scheme is to solve social problems pertaining to poverty, sanitation and education, through the product planning, manufacturing and sales of clothing in Bangladesh, conducted entirely by local people.
- *Social business: A new business structure which focuses on civic concerns, such as eradicating poverty; advocated by Nobel Peace Laureate, Muhammad Yunus.
- *Shareholders can only recover their original investment, and cannot claim any additional profits. Any profits generated are reinvested in the company.
Social Business Structure
01Marketing & Planning
The market price of one T-shirt in Bangladesh is approximately 60 cents. We design products while stepping up marketing efforts on site in order to deliver items of clothing to people in Bangladesh that are of the best possible quality at an affordable price.
We purchase low-price, high-quality materials through partnership contracts with clothing fabric manufacturers in Bangladesh.
It is important not to compromise quality even at low prices. We consign production to local factories that agree with the concept of social business and our own standards drawn from the quality management expertise UNIQLO has cultivated.
Grameen Ladies, who are working toward financial independence through loans from Grameen Bank, handle sales. The women, who generally come from disadvantaged rural areas, sell door to door in rural areas or use their own homes as stores, where they explain product features and sell clothing in a warm and cordial setting. Products are sold on consignment with paid commission based on sales.
05Purchasing and Wearing
Since the prices of our T-shirts are 20% to 30% higher than local market prices, it is vitally important for local consumers to be aware of their quality and durability and understand that the prices are reasonable. We hope they wear the clothing for a long time and appreciate the difference in product quality.
Profits from the sales of the clothes will be reinvested in other social businesses. The goal is to manufacture and sell 100,000 items in the first year and one million by the third year. Because Bangladeshis are developing the business on their own, they have a direct hand in generating job opportunities, improving their lives and encouraging each other to move toward financial independence.
We produce T-shirts and Tote bags, which describe the philosophy of Grameen UNIQLO, in order to inform more people about the social business which we have started with the Grameen Bank group. All profits will be reinvested into our social business.
PRODUCT 01: Message
Professor Yunus's message for overcoming poverty.
The Grameen Bank which is the biggest microcredit bank in Bangladesh received the Nobel Peace Prize along with its founder Professor Yunus in 2006. They lend money to unemployed and poor people without security. This is the product in which UNIQLO shares Professor Yunus's message to eradicate poverty. "The only place where poverty should be is in museums.
PRODUCT 02: Diagram
Diagram to explain the Grameen UNIQLO business model.
Grameen UNIQLO has conducted this social business structure entirely within Bangladesh, from the production to the sales. This business is provided to the entrepreneurs who get loans from Grameen Bank. The entrepreneurs, who conduct the Grameen UNIQLO business, make profits by selling clothing. Grameen UNIQLO strives to solve social problems such as poverty, and encourages people's independence. It makes changes that help to make the world a better place. This is the product which is used in the social business explained by diagram.
PRODUCT 03: Principles
Seven principles which are needed for the social business.
When you start the social business, you observe the 7 principles required by the Grameen Group. 1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization. 2. Financial and economic sustainability. 3. Investors get back their investment amount only. No dividend is given beyond investment money. 4. When investment amount is paid back, company profit stays with the company for expansion and improvement. 5. Environmentally conscious. 6. Workforce gets market wage with better working conditions. 7. ...do it with joy.