Uniqlo-earned 20 billion in China in 4 years, with wages up 40%

During a collective pay cut and slowdown by global companies, Uniqlo's parent company, Fast Retailing, announced a massive 40% pay raise for its 8,400 regular employees in Japan ahead of its 2022 earnings report. Forbes Japan Rich List 2022, 73-year-old Masayoshi Yanai tops the list with $23.6 billion in wealth.

Fast Retailing recorded the highest profit level in the past decade in fiscal 2022, with a net profit of 273,335 million yen, gross margin of 52.45%, and net margin12.37%, and Uniqlo's record revenue of 1.93 trillion chemical yen. China, the second largest market after Japan, accounted for 23.4% of the Group's revenue ratio. From 2019 to 2022, UNIQLO earned approximately 20 billion RMB in net profit from China in four years.

Japan ushered in a low-desire society after the bursting of the economic bubble in the 1980s. This socio-economic background made Uniqlo one of the world's top three fast fashion brands, from a "country brand in the eyes of the Kanto people."

Uniqlo, GU, and Global Brands are the three central business units of Fast Retailing, with Uniqlo accounting for about 84% of total revenue. Overseas business is the core of UNIQLO, accounting for 56% of revenue in FY2022. In particular, the China market accounts for 1/4.

Japan has been avoiding the yen's appreciation, so Japanese companies have relocated overseas production bases. According to the list published in 2019, the Group's annual output is about 1.3 billion pieces, 242 foundry factories, 128 in China, and the others are distributed in 11 countries such as Indonesia and Myanmar.

In recent years, energy and imported food prices have risen, significantly weakening the willingness of Japanese nationals to consume, and Uniqlo needs to do better in Japan.

In FY2022, Uniqlo's revenue and same-store sales in Japan decreased by 3.8% and 3.3% year-on-year, while revenue in international markets increased by 19.4% year-on-year.

North America and Europe (excluding Russia) turned around, with operating margins of nearly 10% and 12%, respectively.

Revenue in Southeast Asia, South Asia, and Oceania reached 240 billion yuan, up 60% year-on-year, making it the next growth expectation point for Uniqlo.

Uniqlo will accelerate the number of stores to 310 new stores in 2023. Especially for Uniqlo. It is expected to have 3,747 stores by next August, including 809 in Uniqlo Japan and 1,740 in Uniqlo International.

The number of stores will accelerate, with 310 new stores to be opened in 2023. Uniqlo, in particular. It is expected to have 3,747 stores by next August, including 809 UNIQLO Japan stores and 1,740 UNIQLO international stores. International fast fashion brands such as NEW LOOK, Topshop, and Forever21 have exited the Chinese market in large numbers, while Uniqlo is like an outlier, perhaps because：

-In the current environment, the whole consumption behavior in China is more rational, and Uniqlo is more in line with the current consumption demand with high-cost performance.

-At a time when fast fashion entities are in decline, Uniqlo is still walking on two legs, grasping e-commerce with one hand and expanding offline with the other.