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UNIQLO Business Model

Last Updated: 2019.01.31
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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) 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 in new materials and global fashions. 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 for each season. Designers then prepare designs and refine samples. Even after a design is decided, its color and silhouette can be refined multiple times before the final design is approved.

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Merchandising

Merchandisers play a vital role in the product creation process, from design through production. Merchandisers communicate closely with all departments before determining the planning, designs, materials, and marketing required for each season. Deciding product lineups and production volumes throughout the year is another important part of the merchandiser's role. Many UNIQLO products are manufactured in huge batches of approximately one million items each. Merchandisers also closely monitor sales levels and decide whether to increase or reduce production during a season.

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Development and Procurement of Materials

UNIQLO can secure stable, high-volume supplies of top-quality materials at a 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 to 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 Network

UNIQLO does not own any factories. We outsource all production to partner factories in China and other countries. We have built relationships of strong trust with our partner factories over many years, and hold annual conventions to promote dialogue with factory managers. We monitor working conditions and environmental protection at textile manufacturers and major fabric suppliers, and help factories implement improvements as needed. Maintaining a win-win relationship with partner factories ensures the production of high-quality products.
As UNIQLO expands globally, we have formed business relationships with partner factories not only in China, but also in countries such as Vietnam, Bangladesh, and Indonesia.

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Production Department

UNIQLO has about 450 production team staff and textile takumi (skilled artisans) in Shanghai, Ho Chi Minh City, Dhaka, Jakarta, Istanbul, and Bangalore. Production teams visit partner factories weekly to resolve production quality or management issues. For quality improvements, customer concerns are communicated to the production department.

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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 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 the optimum level of store inventory. It does this by monitoring sales and stock on a weekly basis, and then 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 HEATTECH, Ultra Light Down jackets, AIRism and BRATOPS. During the campaigns, UNIQLO advertises the products' unique qualities and noteworthy features on TV and in other media. In Japan, we use weekly flyers in the Friday editions of national newspapers, email and social media to attract customers with limited-period discounts (usually between 20 and 30%) on key ranges.

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Stores

UNIQLO Japan had 827 stores (including 43 franchise stores) at the end of August 2018. UNIQLO International had 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 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, both geographically large markets, online sales account for approximately 15% and over 20% of overall sales respectively. In Japan, online sales accounted for ¥63.0 billion (7.3%) of total sales in FY2018. We aim to achieve 30% annual online sales growth in Japan by enabling customers to collect online purchases from nearby UNIQLO stores or convenience stores. We are expanding global online sales by offering exclusive online sizes and products, and semi-order-made goods.

UNIQLO online store

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Customer Insight Team

Our customer insight team is vital to our effort to improve core ranges by analyzing huge volumes of requests and comments from online customers. Already, this analysis has helped improve many products such as seamless down, boa sweatshirts, pajamas and body shaper shorts. Going forward, we will seek to develop new products that fulfill customer desires by strengthening cooperation with specialist IT firms to further enhance our customer information analysis capability.

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