How Bad Is UNIQLO In Japan?

Sales of UNIQLO in the first half of fiscal year decreased by 0.2% compared with the same period last year, and operating profit dropped by 28.3% compared to the same period last year.

UNIQLO finished its 2016 autumn and Winter Conference in Tokyo.

During the dinner, Ryui Masa, the chairman and CEO of her parent company, was asked by the local media the most question: is the performance of the Japanese market so poor, are you ready to adjust the price?

"We have been thinking about how to use the lowest price.

The products are sold out - the world is full of clothes with no added value.

Ryui Masa said.

The so-called "added value" refers to the technical fabric of UNIQLO.

The media are not unreasonable about asking whether to adjust prices.

In the downturn of performance, price reduction is a strategy adopted by many fashion brands.

At the beginning of this year, another fast fashion brand Mango also announced a 15% price cut for its product line.

MUJI also lowered its clothing sales in China last year.

From the 2016 first half of the group's recent earnings report, UNIQLO sales and profits were lower than expected.

Fast marketing said it was affected by seasons and other factors.

Sales in the first half of fiscal year decreased by 0.2% compared with the same period last year, and operating profit dropped 28.3% compared to the same period last year.

In 2014 and 2015, UNIQLO had raised two prices in Japan for 5% and 10% respectively, mainly due to the rising price of raw materials and the depreciation of the Japanese yen.

In fact, Liu Jing, who was interviewed by reporters in a month and a half ago, had already expressed his plan for reducing the price in the Japanese market. At that time, he said that the "simple pricing" (simplepricing) mechanism should be launched.

"In the past, our products were simply priced, such as 1990 yen, 2990 yen."

Ryui Masa said.

"The price increase in recent years is wrong, although we have added"

Products like 2490 yen.

We will bring back 1990, 2990 yen, and other simple and clear pricing rules. "

"It is necessary to lower the price for at least a while until they refurbish the product and introduce something worth paying."

MasafumiShoda, an analyst at NomuraHoldingsInc., told Bloomberg.

In fact, the most difficult problem for UNIQLO is probably not product development.

Its HeatTech and fleece fabrics, which were developed in cooperation with Dongli, Japan, were once proud of it.

The real question is how UNIQLO wants to communicate with consumers and convey the value of these technologies.

Ryui Masa himself is already aware of this problem. "Consumers do not agree that new products that raise prices show reasonable value."