Japan’s fast fashion retailer Uniqlo is pushing deeper into China.
Fast Retailing, parent of Uniqlo, is planning to expand into smaller Chinese cities – tier two, three and even tier four cities – to generate further growth. Uniqlo will add 200 stores this fiscal year and expects profits to grow by 34 percent.
Uniqlo has 316 stores in 70 Chinese cities, with 160 new stores added in the 2013 and 2014. According to an unnamed company source, more than 100 stores are located in first tier cities of Beijing, Shanghai, Guangdong and Shenzhen, reports Want China Times. Shanghai and Beijing accounted for nearly 27.8 percent of its China store total – 50 in Shanghai and 38 in Beijing. Further expansion in tier one cities does not make good business sense given the level of market saturation in those cities.
Uniqlo Greater China CEO Pan Ning sees huge market potential in China given that Uniqlo is only in 70 cities out of China’s 660 to 680 administrative districts.
Going into lower tiered cities, Uniqlo expects to compete with domestic casual wear brands such as Semir, Metersbonwe and GXG. Uniqlo plans to partner with real estate developer Wanda Group to open stores inside Wanda Plaza department stores across China.
In fiscal year 2014, Uniqlo Greater China had sales of 12 billion yuan (US$1.96 billion).
image credit: fast retailing