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UNIQLO Business Model

Last Updated: 2018.11.06
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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 all the way through design, production 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) Development and Procurement of Materials Merchandising Production Department UNIQLO Takumi Team Production Network Inventory Control Marketing Stores Online Sales Customer Creation Team

 

Research & Design (Designers/Pattern makers)

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.

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Merchandising

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.

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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 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.

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Production Department

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.

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UNIQLO Takumi Team

"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."

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Production Network

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.

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Inventory Control

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.

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Marketing

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.

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Stores

UNIQLO Japan had 827 stores (including 43 franchise stores) at the end of August 2018. UNIQLO International has expanded to 1,241 stores, including 726 in Greater China (Mainland China, Hong Kong and Taiwan), 186 in South Korea, 198 in Southeast Asia & Oceania, 78 in Europe and 53 in the North America. New store openings have been especially rapid in Greater China 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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Online Sales

Online sales are increasingly important. In Mainland China and the United States, these sales account for over 15% and slightly more than 20% of our total revenue, respectively. In Japan, online sales accounted for 63.0 billion yen, or 7.3% of the total, in FY2018. 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.

UNIQLO online store

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Customer Insight Team

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.

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