Uniqlo's Competitors

Who are UNIQLO’s competitors?

The competition of apparel retail industry is growing intensive since consumers’ power has become stronger. Consumers consider brands as well as price, service, comfort and function. Also, consumers are always seeking the best products at low price and new trend. Successful retailers thus need to be frequently responsive to new trends, regularly create innovative designs and interact with customers and keep costs low.

UNIQLO, a basic casual apparel retailer, is facing ZARA, H&M and GAP as competitors and maintains an upper-hand when it comes to competition in Asian market, however, it seems it needs new branding strategies in the US and Europe market since the sales result is quite disappointing.

1. ZARA

ZARA has built its strategy embracing fast-changing consumer trends. It has created up to 36,000 new designs every year, and it delivers new products 2-6 times each week to its stores which are more than 2000 around the world in order to meet the needs of its customers. ZARA has opened 73 stores in the US, 129 stores in France, 97 stores in Italy and 68 stores in the UK, with majority of its locations in Spain where it has 438 locations.

ZARA wants to be considered as a high-end fashion retailer with affordable prices targeting the young middle-class population who are sensitive to latest fashion trends. Therefore, its flagship stores are located in central areas with high real estate costs where its target customers are easily accessible, such as Ginza in Tokyo, Oxford Street in London, Calle Serrano in Madrid and Fifth Avenue in New York. Unlike UNIQLO, ZARA does not advertise for brand awareness; it doesn’t find advertising necessary when it is already known by many people. Its finance which would have gone to advertising is allocated to purchasing central locations which are close to other luxury labels to build strong brand values and identities that is “affordable luxury fashion brand”.

1. H&M

H&M(Hennes & Mauritz) is a Swedish multinational clothing retail company that has the most physical locations among apparel retailers, with over 4,000 stores worldwide. It is the second largest apparel retailer, just behind INDITEX which is a parent company of ZARA.

H&M’s strategy is somewhat a hybrid of UNIQLO and ZARA. It acquires most fashionable items as well as durable longer-lead items that are called EDLP (Every Day Low Prices). In addition, in order to meet the needs of the customers, H&M has collaborated with well-known fashion designers such as Karl Legerfeld for new collections and offers its customers different styles from its mainstay designs. H&M has been successful in making the combination of the trendy design under a low price clothing label.

Aside from strategies that have led H&M to success such as production cost, pricing or quality of products, its branding strategies enable it to differentiate the brand from its competitors. Firstly, its brand name is easy to pronounce and can be remembered by customers and the logo is simple and catchy. In addition, it creates new concept that anyone can be trendy and cool without wealth by combining the concept of affordability and luxury. H&M’s business mission “Fashion and quality at the best price” that can be found everywhere, from online websites to physical stores, gives messages to customers that it guarantees high quality and fashionable style of clothes with affordable prices, which is quiet attractive for consumers.