UNIQLO Business Model | FAST RETAILING CO., LTD.

Last Updated: 2022.03.08
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UNIQLO is able to produce such an amazing number of unique products because our business model unifies the entire clothes-making process–from planning and design through production, distribution, and retail. UNIQLO’s market share is expanding worldwide as it develops radical new materials together with the world’s best fabric technology innovators and creates basic designs using superior natural materials. UNIQLO LifeWear is high-quality, innovative clothing that is universal in design and comfort. It is made for everyone, everywhere. UNIQLO leverages today’s increasingly digital world to communicate directly with customers and quickly transform their desires into actual products.

Research & Development (Designers/Pattern Makers)

An important part of R&D at UNIQLO is to develop products that respond to customer requests, while also identifying new and emerging needs. Accordingly, our R&D centers constantly research global fashion trends and new materials, working to anticipate future shifts in the lifestyles and needs of our customers. One year before a product’s intended launch, the R&D department holds a concept meeting with a diverse range of representatives from the merchandising and marketing and materials-development teams to determine the right design concept for the season. Our designers then begin the process of preparing designs and refining samples. Even after a design is decided, its color and silhouette can be refined multiple times before the design is ready to be finalized.

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Merchandising

The merchandising team plays a vital role in the product creation process, from planning through production. Deciding product lineups and volumes throughout the year is an important aspect of the department’s job. To do this, merchandisers communicate closely with R&D, the production department, and other divisions to determine the designs and materials required for each season’s products. They also manage the launches of our strategic products in close cooperation with other key departments. Many UNIQLO products are manufactured in lots of approximately 1 million units, and the merchandising department monitors the latest sales conditions, issuing instructions to either increase or decrease production during the season–another key responsibility of the team.

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Development and Procurement of Materials

UNIQLO can secure stable, high-volume supplies of top-quality materials at low cost by negotiating directly with materials manufacturers worldwide. Utilizing our economies of scale enables us to achieve more favorable terms than any other manufacturer. The materials used for our core items are particularly important. Our in-depth research and experimentation generate improvements in the functionality, feel, silhouette and texture of our clothes. For example, we work closely with Kaihara Corporation to source denim to specific spinning standards and dyeing specifications. We also partner with world-leading synthetic fiber manufacturer, Toray Industries, to create innovative new fibers and materials such as the ones found in our HEATTECH range.

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Production Network

UNIQLO partner jeans factory

UNIQLO does not own any factories. Instead, we outsource the production of almost all our products to factories around Asia. We have built strong relationships of trust with our partner factories over many years, and hold annual conventions to promote dialogue with factory managers. We conduct monitoring programs at our sewing factories and major fabric suppliers to prevent human rights violations, to ensure good working environments, and to protect the environment when our products are being made. As required, we help factories implement improvements. UNIQLO continues to produce high-quality products by maintaining a win-win relationship with partner factories. As we expand globally, we continue to grow our partner factory network in countries like Vietnam, Bangladesh, Indonesia and India.

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Production Department

We assign production department members, who manage product quality and production progress, and Takumi (skilled artisans), to production offices in Shanghai, Ho Chi Minh City, Dhaka, Jakarta and Bengaluru. Production office representatives visit partner factories weekly to resolve any issues. The production department swiftly addresses any quality concerns raised by customers and implements improvements if required.

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UNIQLO Takumi Teams

“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 products. I am proud to be passing on expert Japanese techniques to the next generation of technicians.”

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Inventory Control

The inventory control department maintains ideal store inventory levels. It does this by monitoring sales and stock on a weekly basis, and then dispatching inventory and new products to fulfill orders. At the end of each season, merchandisers and the marketing department work together, coordinating sales promotions to help reduce residual inventory.

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Marketing

Each season, UNIQLO conducts promotional campaigns for core products such as HEATTECH, Ultra Light Down, AIRism and Bratops. During these campaigns, UNIQLO emphasizes each product’s unique features and benefits on TV and in other media. In Japan, we use UNIQLO apps, email, social media, and flyers delivered with national newspapers to notify customers about limited-period discounts, typically of 20% to 30%, on new seasonal ranges.

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Stores

UNIQLO Japan had 810 stores (including 30 franchise stores) across Japan as of the end of August 2021. UNIQLO International expanded to 1,502 stores, including 932 stores in the Greater China region, 134 in South Korea, 270 in South Asia, Southeast Asia & Oceania, 109 in Europe and 57 in North America. We have been accelerating new store openings, primarily in the Greater China region and Southeast Asia.

Japan store locator

Global store locator

UNIQLO store openings/closings (Japan)

You can see photos of UNIQLO Japan stores in Photo Library.
Photo Library | UNIQLO Japan

You can see photos of UNIQLO International stores in Photo Library.
Photo Library | UNIQLO International

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E-commerce

The importance of our e-commerce operation is growing as more customers enjoy shopping both online and in stores. In FY2021, online sales accounted for approximately 18% of total sales. Geographically, online sales accounted for roughly 20% of total sales in the Greater China region, 10% in South Asia, Southeast Asia & Oceania, 30% in Europe, and 40% in North America. We will further enhance combined e-commerce and retail store services and build systems that enable customers to shop conveniently at times and places that suit them.

UNIQLO online store

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Customer Center

Our customer centers analyze huge volumes of customer requests. Customer feedback helps us improve core products, and to develop new products, such as front-opening innerwear and highly-absorbent sanitary underwear. In April 2021, we added a new customer center at our Ariake headquarters in Tokyo to complement our existing Yamaguchi center. This enables us to connect customer insights directly to management, and to apply them to product and service development in real time.

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