Miki Xue wears ivory lace miniskirt, Guess rhinestone pendant and – all the rage in Shanghai – heavy black glasses without lenses.
Blending thrift with style, she is the perfect consumer for Uniqlo, the brand owned by Japan’s Fast Retailing.
On Saturday the retailer opens its largest flagship store in Shanghai, a milestone on its path to opening 1,000 stores in China and generating Y1,000bn ($10.9bn) in revenues in the next decade.
Like Ms Xue, training manager for a cosmetics company, many Chinese consumers want what Uniqlo offers – Japan branding at China prices.
“Chinese consumers love Uniqlo’s version of premium cheap. Uniqlo is growing like crazy,” says Shaun Rein, head of China Market Research Group in Shanghai.
According to Tadashi Yanai, president of Fast Retailing, the 39,000 sq ft Uniqlo store in Shanghai’s Nanjing Road will bring the number of China stores to 65, including Hong Kong.
From fiscal year 2012, the retailer will open Uniqlo stores in China at the rate of more than 100 a year, he said.
The Shanghai store has a three-storey glass atrium with “flying” mannequins and polo shirts in 88 colours – 8 is lucky in China and two 8s are luckier.
It is the fourth Uniqlo flagship store after New York, London and Paris.
Fast Retailing has had little choice but to look outside its home market, where it has 790 stores after more than two decades of expansion.
With the ageing of Japanese society, the retailer’s home market is showing signs of saturation.
Expanding in Asia, and particularly China, is vital to achieving Mr Yanai’s goal of the company the world’s leading apparel manufacturing retailer with Y5,000bn in revenues and Y1,000bn in pre-tax profits by 2020.
Revenues in the year to August 2009 were Y685bn.
Although the maker of Uniqlo casual clothing remains one of the biggest success stories in Japan, making record net profits of Y49.8bn in its last financial year, the pace of growth is likely to slow in the years ahead.
In March and April this year, Fast Retailing suffered a year-on-year decline in existing store sales in Japan, where the sluggish economy and concerns about the reliability of pension payment commitments have damped consumption.
Japan’s Y12,000bn apparel market has been shrinking about 2 per cent a year for the past 5 years, according to Masafumi Shoda, an analyst at Nomura in Tokyo.
Clothing sales in Shanghai, too, are flat, Mr Rein says.
But opening a flagship store in Shanghai is a smart move, he believes.
“It shows respect to local consumers and will help boost the brand in second and third tier Chinese cities, which are showing strong growth in apparel sales.”
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