Overseas Market: Economic Downturn + Consumption Pformation

According to the earnings report released by XXX group, the net profit fell by 55.1% in the first 6 months of February 29, 2016 as compared with the same period last year, only 47 billion yen (about 2 billion 800 million yuan). This is also the first time that the net profit of the group has declined for the first time in the past 5 years.

To this end, XXX group also lowered its performance expectations for the fiscal year ending August. The estimated operating profit will be reduced from 180 billion yen (10 billion 26 million yuan) to 120 billion yen (about 7 billion 152 million yuan) announced in January this year, compared with 164 billion 400 million yen (8 billion 697 million yuan) in the previous fiscal year.

It is worth noting that although the performance in the first half of the fiscal year is not very good, XXX group reiterated its mid term vision in 2020 in the earnings report: to achieve 5 trillion yen (298 billion yuan) revenue in 2020, more than Zara parent company Inditex SA (ITX.MC) and H&M parent Hennes Mauritz AB (HMb.ST), becoming the world's largest apparel manufacturer and retailer.

However, in the face of declining performance and market expectations, it is not clear how the Asia's largest clothing group will close its target.

although

Poor local performance, while in overseas markets,

In the first half of the year, performance was generally in line with expected revenue growth, but profits were lower than expected.

The mainland business of UNIQLO has basically increased its revenue in the current period, but the final operating profit has declined slightly due to the exchange rate.

The South Korean market was hit hard by the warm winter and the economic situation.

The US market is dragged down by losses in inventory and closing stores, and the deficit is still expanding.

The performance of Southeast Asia, Oceania and Europe generally met expectations, with double growth in income and net profit.

To sum up, although UNIQLO has maintained a good growth trend, it is not good enough to be sold in the main parts of Japan and overseas, resulting in poor performance of UNIQLO in the first half of fiscal year.

Guo Zengli also believes that, despite the current China's

And consumer demand is more optimistic, but cost pressures and labor regulations will have a certain impact on enterprises. At the same time, China's clothing consumption market is in the stage of aggravating differentiation. Personalized and niche consumption trends are stronger and stronger. Therefore, relying solely on public funds can not be once and for all. UNIQLO also needs to drive brands through innovation.

For the problems shown in UNIQLO's earnings, Yang Dayun, President of the international fashion brand investment company, said that from a macro point of view, the global economic downturn has slowed down the development of fast fashion brands with more than a decade of rapid development, coupled with the slow fermentation of the Chinese market. The rise of interconnected e-commerce has made fast fashion brands expand rapidly, thus entering a slow growth or even a growth bottleneck.

At the same time, the pformation of consumer psychology in China and the intensified pursuit of personal style make people feel weary of basic funds. Combined with these factors, it is expected that the net profit of UNIQLO will drop.

"At present, the fast fashion market is already on the verge of saturation.

I believe that in the next 5 years, the fast fashion brands including Zara, H&M and UNIQLO will also undergo a deep adjustment and shuffle period, as the change in consumption patterns brings about changes in consumer behavior, so the short peak of fast fashion brands in the industry is over.

In the future, customized, diversified and personalized products and services will be the new trend of development, and the new consumption era will come. "

Yang Dayun said.