At first glance, Uniqlo is an unusual story of a Japanese clothing retailer succeeding overseas. But it follows in the footsteps of Japan’s industrial and manufacturing firms
, and Inditex, the parent of Zara—are based in Sweden and Spain respectively. But the firm’s growth abroad follows as much in the footsteps of Japan’s industrial and manufacturing firms as its European peers.
Japanese industrial firms, carmakers in particular, made South-East Asia a second home from the 1960s onwards. Fast Retailing is also expanding particularly rapidly in Asia, where sales are up by 71% in the six months to the end of February, compared with the same period a year ago. The region now accounts for 16% of sales, up from 11% a year ago, and it is closing in on mainland China, Hong Kong and Taiwan, which dropped from 25% to 22% over the same period.
The comparison extends beyond geography. Exposed to demographic constraints in fast-ageing Japan, Fast Retailing has used technology and automation to replace workers, further mimicking the country’s large manufacturers. Keyence, a largely unheralded giant of industrial automation, is Japan’s second-largest listed firm, worth $111bn. Since 2017 Uniqlo has embedded all its garments with tiny identification tags, which enable automatic scanning at checkouts.
The reliance on automation goes deep into the company’s business operations and supply chain, too. In 2019 it joined up with Japan’s Mujin and France’s Exotec Solutions, both small robotics companies, with the aim of automating the jobs in its warehouses. It had already joined forces in 2018 with Daifuku, a larger automation firm, which helped reduce the workforce at a warehouse in Tokyo by 90%.
The savings are no longer just a bonus for the firm’s bottom line. Uniqlo raised salaries for some employees by up to 40% in March, in an effort to make corporate wages comparable to similar firms internationally, in order to compete for talent, and will set pay based on global standards in future. Savings from automation will be a necessity if the company wants to avoid eating into its profit margins to bump up salaries for its staff.
Belgique Dernières Nouvelles, Belgique Actualités
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