our business

business model

global markets driving future growth

The Fast Retailing Group’s mainstay brand, UNIQLO’s overriding aim is to create comfortable everyday clothes that enrich peoples’ lives. UNIQLO LifeWear is completely different to what other apparel brands are offering. It is a new, unique category of truly great clothing, offering high-quality, fashionable everyday items.

In 2017, UNIQLO has expanded to over 830 stores in Japan and 950 stores in international markets. In addition to Japan, Greater China (Mainland China, Hong Kong and Taiwan) and Southeast Asia markets are likely to be the primary drivers of future growth. By adding 100 stores annually, the size of the Greater China network will soon overtake Japan and reach our initial target of 1,000 stores.

UNIQLO’s European operation is now profitable. Over the next two or three years, we are looking to double the number of UNIQLO store in Europe, currently around 40. We will continue to embrace the local culture and historical backgrounds at each individual stores attentively, so that we can build strong and trusting relationship with respective customers and the local communities.

UNIQLO USA remains in the red, but business is steadily improving. Our focus is to transform our store operation, store expansion strategy and online sales. A strong presence in the pivotal North American market is vital if we are to build UNIQLO into a leading global brand. We will address the North American operation on solid footing and put UNIQLO on the path to becoming the world’s No.1 apparel brand.

uniqlo business model

Today, everyone of all ages uses the internet, and that is dramatically influencing the way we shop.

UNIQLO leverages today's increasingly digital world to communicate directly with customers and instantly transform consumer desires into actual products.

UNIQLO produces such an amazing number of unique products because our business model unifies the entire clothes-making process from planning through design, production and retail.

UNIQLO's R&D centers continually research the latest new materials and the latest global fashions. Roughly one year before a product's intended launch, the R&D department holds a concept meeting with representatives from the merchandising, marketing and materials development teams to determine the right design concept. Designers then prepare designs and refine samples. Even after a design is decided, its color and silhouette can be refined multiple times before it is finalized.

Merchandisers play a vital role in the product creation process, from design through production. They communicate closely with many other departments before determining the planning, design, materials and marketing approaches required to satisfy predetermined seasonal concepts. Merchandisers decide product lineups and production volumes for the fall, winter, spring and summer seasons. Many UNIQLO products are manufactured in mass lots of approximately one million items. Merchandisers also closely monitor sales levels and decide whether to increase or reduce production for particular items during a season.

UNIQLO can secure stable, high-volume supplies of top-quality materials at low cost by negotiating directly with materials manufacturers and placing large-volume orders. The materials used for our core items are particularly important. Our in-depth research and experimentation generates multi-layered improvements in the functionality, feel, silhouette and texture of our clothes. For example, we work closely with the denim industry's reputed Kaihara Corporation to source denim of specific spinning standards and dyeing specifications. We also partner with Toray Industries, a world-leading synthetic fiber manufacturer, to create innovative high-function materials and products such as HEATTECH.

UNIQLO currently deploys about 450 production team staff and textile takumi (skilled artisans) to production offices in Shanghai, Ho Chi Minh City, Dhaka, Jakarta, Istanbul and Bangalore. Production teams visit partner factories each week to resolve outstanding issues. Customer concerns regarding quality are communicated immediately to Production Departments, and improvements are made.

"By offering instruction on dyeing technology at UNIQLO's partner factories, I can encourage workers to embrace a new production management philosophy and improve the factories they work in. Our cultures may be different, but our aim is the same--to make truly good great products. I am proud to be passing on expert Japanese techniques to the next generation of technicians."

As UNIQLO expands globaly, we have formed business relationships with partner factories in China, Vietnam, Bangladesh and Indonesia. We are looking to expand our manufacturing base by developing relationships with factories closer to UNIQLO stores in Europe, the United States and eleswhere.

The Inventory Control Department maintains the optimum level of store inventory. It does this by monitoring sales and stock on a weekly basis, and dispatching necessary inventory and new products to fulfill orders. At the end of each season, merchandisers and the Marketing Department work together to coordinate the timing of any price changes to help ensure that inventory sells out.

Each season, UNIQLO conducts promotional campaigns for core products such as fleece, Ultra Light Down jacket, AIRism and HEATTECH. During the campaigns, UNIQLO advertises the products' unique qualities and noteworthy features on TV and in other media. In Japan, for example, weekly flyers in the Friday edition of national newspapers, which are delivered to most households, announce week-long 20-30% off campaigns to promote new items.

UNIQLO Japan had 831 stores (including 41 franchise stores) at the end of August 2017. UNIQLO International has expanded to 1,089 stores, including 645 in Greater China (Mainland China, Hong Kong and Taiwan), 179 in South Korea, 163 in Southeast Asia & Oceania, 56 in Europe and 46 in the North America. New store openings have been especially rapid in Greater China and Southeast Asia.

Online sales are increasingly important. In Mainland China and the United States, these sales account for over 10% and 20% of our total revenue, respectively. In Japan, online sales accounted for 48.7 billion yen, or 6.0% of the total, in FY2017. There, we have improved our online services by enabling customers to collect online purchases from nearby convenience stores or UNIQLO locations. We are looking to expand online sales worldwide by offering a fuller range of exclusive online products, special online sizes and semi-order-made goods.

Our customer insight team is growing in importance every year. It uses big data--including product comments, purchase trends and requests submitted to our Customer Center and made online--and analyzes this information to predict demand and make product improvements. UNIQLO production often continues into the selling season, and demand predictions help us make effective mid-season judgments and adjustments. The information gained through data analysis also helps us to create the products customers most desire.