*Thanks to a ecommerceIQ Community member for sharing the launch of LazMall with us:

In case you missed it, JD Central’s long awaited joint venture went live in Thailand a few days ago:

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And reviews have already come in,

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Though rough, the experience has been positive so far and as expected by JD, delivery reliable and quick. The partnership with Thailand’s largest retail conglomerate Central Group indicates JD.com is attempting to replicate its value proposition in China in Southeast Asia: a high quality ecommerce experience for authentic goods.

“If you promise people to deliver same day, people will more likely buy. Our people will literally cross rivers and climb mountains to get the package to the end customer.” – Louis Li, former Deputy GM of JD Worldwide

It seems Chinese players Alibaba and JD.com are looking to establish its number one and number two statuses in Southeast Asia ecommerce, respectively. Alibaba known for its hit-or-miss products at cheap prices and JD.com for the authentic goods and reliable customer experience.

And now that JD.com has planted its flag in Thailand, Alibaba/Lazada isn’t going to sit back casually – hence, (re)introducing LazMall.

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Consumer newsletter by Lazada Thailand

What is LazMall?

Very simply, it is a replica of the widely successful Tmall in China – a platform for official brands. In Lazada’s own words:

‘LazMall is an exclusive channel featuring items sold by leading international and local brands.’

“At LazMall, we aim to offer an online shopping experience of the highest-quality to garner the trust of our customers and provide the convenience they long for. LazMall will provide customers with the following promises: 100% authenticity and 15-day easy returns.”

There also appears to a number of benefits by becoming a LazMall seller:

• LazMall badge on all your products throughout the customer journey; see LazMall Indonesia
• Enjoy higher visibility on homepage and higher search ranking
• Exclusive access to dedicated LazMall campaigns
• Dedicated customer service team for LazMall customers

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Brand dashing to marketplace

Not quite.

Brands commonly will teeter with the idea of a brand.com and/or marketplace and the answer we always give is “a marketplace strategy is important in Southeast Asia as part of a bigger digital strategy, but it shouldn’t be the only online effort by a company.”

While LazMall aims to create a safe space for brands to promote themselves online by setting strict authenticity procedures and greater visibility over unofficial sellers, activity the US and China have taught us the brand relationship with a marketplace is a tricky one and from it emerges a power struggle.

A well-known American brand saw its Tmall sales plummet 10% to 20% for 2017.

“Based on our sales record, we should have been in a prominent position, but we were at the bottom of the page,” said the brand’s ecommerce director, who spoke anonymously to the Bangkok Post for fear of further retaliation. “That’s a clear manipulation of traffic. That’s a clear punishment.”

Executives soon learn that what Alibaba gives, it can also take away.

How did the marketplace gain so much power?

A few factors. First, all that money business tech sites complained about marketplaces burning was to grab market share and market share translates into influence. If you’re not present on marketplace or selling on your own website, you’re losing an important revenue channel.

As reported by the New York Times about Amazon, Lazada also has an advantage over traditional retailers and its own merchants that no one else has: knowledge and access to data from its platform. 70% of Amazon’s word searches are for generic terms such as “running shoes” or “games”, meaning Amazon can choose what to display in search results. Will it be Nike or Adidas shoes? Well, it probably depends on who is being a better merchant to the marketplace – driving traffic, exclusive promos, etc.

We can expect something similar to take place in Southeast Asia but this doesn’t necessarily mean brands are guaranteed to lose out.

KitchenAid recently launched with us and their revenue was two times than targets,’ – Lazada Singapore Category Manager

The rise of digital has forced brands used to having 100% control learn how to barter for maximum visibility. The birth of a brand to marketplace relationship is also why ecommerce enablers are popping up everywhere in Southeast Asia to mediate the wants and needs of both.

“[Enablers] allow me to focus on my core business capability and rest assured online segment is still moving along” – eIQ Community Member, Ecommerce Enabler survey

Your move brands.

Want to learn more about participating in LazMall? Contact us at hello@ecommerceIQ.asia 

Uber seems to be doing well after its abrupt exit from the competitive Southeast Asia market after selling to local competitor Grab. The ride-hailing company made $2.5 billion in profit on $2.6 billion revenue in Q1 2018.

“Uber gained $2.9 billion after it merged its businesses in Russia and Southeast Asia with local competitors.” – Recode

How has Grab spent this time and opportunistic time to grow market share?

Well, the Singaporean based, ride-hailing Grab celebrates its sixth birthday this year and its founder and CEO Anthony Tan recently took the occasion to announce the launch of its new investment arm: Grab Innovate.

This is a good sign pointing to healthy coffers and without Uber, the company has a relatively a smooth path to a ride-hail/all-in-one super app monopoly in Southeast Asia markets (that are not Indonesia).

A lot has changed since Uber’s exit two months ago.

Grab’s Timeline Following Uber’s Exit

March 25th – Uber exits from Southeast Asia, sells to Grab
May 7th – Grab rolls back discounts for customers and incentives for drivers
May 7th – Grab Singapore launches three new services: GrabAssist, GrabCar Plus and GrabFamily
May 7th – Grab allows cash top up feature in the Philippines
May 17th – Motorbike taxi drivers protest in front of Grab Bike office in Bangkok
May 28th – Grab launches GrabFood in Singapore
June 4th – Grab announces launch of Grab&Go allowing riders to try up to four free samples such as cereal bars, shampoo, etc. during their rides
June 5th – Grab announces launch of Grab Ventures and Velocity

But there has been backlash from various communities – rider and drivers alike – who are disappointed with the company’s recent performance, user experience after only now being forced to use the Grab app.

What are customers unhappy about?

Based on an ecommerceIQ Community survey, the top two ride-hailing providers preferred by customers remain Grab and Uber.

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It is also important to keep in mind the top respondents reside in Singapore, Indonesia and Thailand that can skew the results as LINE and Go-Jek aren’t available in Singapore.

When asked about the other value-added services used in addition to ride-hailing, customers chose “Food delivery” and “Package delivery” in second and third place, respectively. Results also revealed the adoption of built-in e-wallets aren’t popular.

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And all hell broke loose when customers were asked to ‘speak their mind’ about Grab services in Southeast Asia. These were a few of the replies:

“Functionality not as good as Uber, but improving. Maps not as accurate, main gripe is timings – the estimated times are totally off so really hard to know when to book. Wallet has been useful at hawkers / festivals a couple of times, would use more if that expands.”

“Cannot change the pickup location (sometimes GPS is not accurate) – tried ordering food at 11AM and it said rider not available – got a lot more expensive and waiting got much worse after Uber’s exit.”

Prices has increased dramatically since the merger with Uber; what’s worse is, driver availability has also gone down since.”

Too expensive now. Confusing fare structure and flat rate charged before the trip are more expensive than taking a taxi. Losing UberEATS for GrabFood is the bigger disappointment though – at least Grab’s transport works, the GrabFood UX/UI is the worst app I’ve opened for four years and completely unfriendly to non Thais.”

And a single positive reply:

“Awesome.”

Most common complaints? Terrible UX, inaccurate Maps, lack of drivers and more expensive than before.

Go-Jek to the rescue?

Not quite.

While on-demand in Indonesia is essentially untouchable due to Go-Jek’s market dominance and customer loyalty, the company will struggle to convince other Southeast Asians to download yet another on-demand app when they expand.

But a window of opportunity may be wide open for them if Grab doesn’t improve its user experience (and quickly given Go-Jek’s long-awaited expansion).

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Source: GrabFood Apple Store reviews

During our intimate interviews with Jakartians who surprisingly use multiple digital payments, we discovered it is all due to convenience. Because they already use Go-Jek to order everything else on one platform – one app. They don’t want to install more applications on their mobile phones.

Let’s say Go-Jek is able to overcome tricky government regulations, assemble driver fleets, and jump through talent pool hoops, customers trying Go-Jek, already well-known in Indonesia for its superior UX/UI, have access to the company’s all-in-one app services – all in one.

This is an already added plus considering users need to download a separate GrabFood app to order food versus the built in function in Go-Jek’s app.

GoJek’s expansion will also mean users can enjoy lower prices as companies will likely revert back to heavy subsidies to win customers and leading to Grab dropping prices once again.

ecommerceIQ, Consumer Pulse

Source: ecommerceIQ Ride Hailing Survey 2018

Competition is a good thing

Competition encourages businesses to improve the quality of goods and services they sell to attract more customers and expand market share.

“Preparations are well under way and within the next few weeks our first new country launch will be announced. This will be followed by three other countries in Southeast Asia by the middle of the year.” – Nadiem Makarim, CEO and founder of Go-Jek.

Citing the financial and strategic backing of its local and global partners, he added: “We are confident that we have more than enough support to take one of the most amazing growth stories in the world from being an Indonesian phenomenon to a global one.”

Grab should be taking advantage of this brief moment of competitor-less time to become even more user friendly, push revenue limits and popularise its e-wallet, but based on survey results, forgotten to optimise its core value proposition – a seamless ride-hailing experience.

Brace yourselves everyone, we’re in for another on-demand showdown.

Millennials are shaking up the travel industry with their penchant for authentic, unique experiences and Muslims are no exception to this rule. The size of the Halal travel industry is expected to skyrocket with more millennials entering the workforce and pocketing greater disposable incomes.

That’s one of the key takeaways of “Halal Travel Frontier 2018”, an industry report published by Crescent Rating in conjunction with MasterCard.

Crescent Rating, which first started analyzing the Muslim travel market in 2008, says that there were an estimated 126 million Muslim travelers in 2016. The number is expected to grow by nearly 30% in the next four years, settling on 156 million travelers in 2020.

In 2015, Crescent Rating estimated total purchases by Muslim travelers to be roughly US$145 billion. This factors in expenditure on Halal food, hotels, excursions & experiences, and shopping. The number is expected to rise to a colossal US$300 billion by 2026 – more than doubling in volume in a little over a decade.

A large chunk of this growth is fueled by millennial Muslim travelers in the fast-growing economies of Indonesia, Malaysia, Turkey, and Gulf countries. 60% of the population in Muslim majority countries is currently under the age of 30 – a stark contrast to the global average, which is 11%.

It’s a demographic that players in the travel & tourism space simply cannot afford to ignore anymore.

“Brands would also need to increase their level of empathy and find new ways to better connect with Muslim travelers,” explains Fazal Behardeen, CEO of Crescent Rating. “This will be key in order to both appeal and empower their Muslim travelers.”

What are Muslim millennials looking for?

One of the seminal insights proffered by Crescent Rating is the emergence of the Muslim female travel segment. This particular demographic is gradually becoming a force in its own right with females opting to travel with their friends & family in small to medium-sized groups.

The key purchasing factors for such consumers are “specialized travel products and lifestyle services.” Destinations looking to attract female Muslim travelers are advised to engender a safe and accessible environment that respects the cultural and religious sensitivities at play.

South Africa and Indonesia are tipped to be major travel destinations for Muslims, but Asia as a whole is expected to eat up the largest chunk. The Indonesian government itself has set up an ambitious target of attracting 5 million Halal travelers in 2019, more than double the 2 million that visited in 2016. Other popular destinations are Malaysia, Thailand, and Singapore.

Sporting events in Asia such as the Winter Olympics in South Korea this year as well as the Tokyo Summer Olympics in 2020 are also expected to court significant numbers of travelers from Muslim-majority countries.

Outbound travel markets. Photo credit: Crescent Rating

The potential is undeniable. How can brands cash in?

Muslim travelers tend to weigh in specific factors before reaching a firm decision on a travel destination, according to Crescent Rating. There should be facilities that allow for accessible prayer areas, restaurants & cafes serving certified Halal food, and toilets with provision for ablution. Most travelers will flock to social media or do extensive research on the web prior to embarking on their journey.

At the same time, governments also have an opportunity to help local businesses by offering prayer facilities and Halal food in public locations like airports, railway stations, and places of interest. Taiwan is cited as an example of a country actively working to meet this demand.

Like millennials around the world, Muslim travelers will likely start their buyer’s journey on the web by searching for travel content but most mainstream sites – Booking.com and Agoda, for example – don’t have dedicated listings for Halal-friendly establishments or significant insights on where Muslims might feel comfortable.

“We find that Muslim millennial travelers are like most millennial travelers apart from their uncompromising faith-based needs,” explains Raudha Zaini, marketing manager at Halal Trip, a B2C travel portal for Muslims. “They seek what we call the 3As when they travel – Authentic Experience, Affordable Facilities and Accessible Network – all within the radius of their faith requirements.”

According to the Pew Research Center, the Muslim demographic around the world is expected to grow twice as fast as the overall world population between 2015 to 2060, reaching a projected 3 billion individuals. In terms of consumer spending alone, the global Islamic economy generated US$1.9 trillion in food and lifestyle expenditure in 2015 with projections that it’ll grow significantly to US$3 trillion by 2021.

For brands looking to appeal to a gargantuan demographic hiding in plain sight, they’ll have to focus on crafting their message and developing empathy. That’s key if they’re looking to connect with young Muslims on a personal level. One thing for sure is that the market will continue to expand at a ferocious rate.

So far the rate of adoption has been slow, at best. UK-based retailer Marks & Spencer launched a burkini swimwear collection in 2016 to a spurt of criticism. Despite dissenting voices, the line completely sold out showing there’s real demand.

Other examples are the 2017 launch of the four-star Al-Meroz hotel in Bangkok, the first Halal hotel in Thailand as well as Expedia’s US$350 million in Indonesian online travel platform Traveloka the same year.

But these are tepid responses to a market valued at hundreds of billions. Larger brands can, and should step up to match smaller incumbents like Indonesian halal cosmetics company Wardah, India’s IbaHalalCare, and California-based AmaraCosmetics.

The Muslim population is projected to reach 3 billion people in 2060, increasing at a growth rate faster than the world’s population and set to make up 31% of total population. As their consumer affluence becomes more prevalent, this demographic has become key for certain retail brands trying to grab market share.

In Southeast Asia, where 25% of the global Muslim population lives (1.6 billion), the young female Muslims, also known as Muslimah, present a new opportunity with their religious yet more worldly outlook than the previous generation.

This influential, trend watching group is open to a wider range of fashion, travel and product choices — prompting the Halal industry to move beyond the food sector.

Southeast Asian Muslim preference

Other sectors quickly catching up in Halal industry. Source: Global Islamic Finance Report

 

“Young Muslim women are showing a new set of aspirations and behaviors which represent both opportunities and challenges for brands,” said Chen May Yee, APAC director at The Innovation Group

But they also present new challenges and to better target this tech-savvy audience, companies need to combine trends, digital channels while meeting religious requirements.

Muslimah representation matters

A recent survey by JWT Intelligence’s Innovation Group focused on the Muslimah population in Indonesia and Malaysia, two of the biggest Muslim populations in the region, found that Japanese brands are regarded the highest among the 1,000 individuals surveyed.

http://gifr.net/gifr2013/ch_13.PDF

Japanese brands are the most popular among Muslimah in Indonesia and Malaysia compared to brands from other countries. Source: JWT Intelligence’s Innovation Group

It’s not too surprising given that more Japanese brands have geared marketing efforts towards the Muslim population, especially in fashion and beauty.

For example, Uniqlo recently collaborated with Muslim designer Hana Tajima and while textile brand Fukusa launched a silk-kimono hijabi fashion line in Indonesia.

Clothing remains the most popular category, followed by beauty, technology products, travel, and groceries.

Southeast Asian Muslim preference

More Indonesian Muslimah shop online as local players provide more options for them. Source: JWT Intelligence’s Innovation Group, Daniel Abd Halim.

As with the rest of the region, this demographic is showing a higher aptitude towards digital. They are spending at least four hours online every day, and one of the activities of choice is online shopping.

24% of Malaysian Muslimah shop online once a week and 56% do it at least once a month. The number is higher for their Indonesian counterpart, likely because of more Muslim choices provided by local players in Indonesia like HijUp, MuslimMarket, and Wardah.

However, the two cohorts differ on their opinion regarding representation in the ads that circulate in the market. Majority of Muslimah in Indonesia (82%) feel that the ads reflect the reality of the needs of their everyday life, while only 56% of Malaysian Muslimah feel the same — showing the gap for brands to provide more relatable products or experiences for this audience in Malaysia.

Tapping into a multi-trillion industry

The Halal or “lawful/permissible” industry is estimated to be worth around $2.3 trillion worldwide, growing at an annual rate of 20%. The products are not only for Muslims and also gaining more popularity among non-Muslims as a symbol of quality assurance and a lifestyle choice, but in order to capture more customers, brands need to be more than Halal.

Recognizing that Muslims have different experiences and reasons to purchase such as increase in shopping for household or beauty goods during certain holidays, brands can optimize marketing strategies to attract more loyal customers.

Compared to the other Southeast Asian countries, not much is known about Myanmar’s market potential.

Despite being late in joining the world wide web, the country’s internet penetration grew 97% in one year, reaching 26% of the population, roughly 14 million users.

eIQ speaks with Win Nander Thyke, founder and CEO of rgo47 — one of the leading online retail companies in the country — to shed light on the country’s retail potential, evolving Burmese shopping behavior, and why she believes strongly in the market’s future.

Realizing Myanmar’s new consumer

Rgo47, initially Royal Golden Owls (RGO), was introduced in 2013 during Myanmar’s inaugural hosting of the biennial Southeast Asian Games (SEA Games).

By leveraging her family’s fashion business, RGO was responsible for producing the official merchandise for the SEA Games such as t-shirts and fashion accessories to be displayed and sold at the two-week event.

Myanmar ecommerce market

Official SEA GAmes Myanmar banner with RGO as a sponsor.

It was the right opportunity to send a positive image of Myanmar and reach a large audience with her new apparel brand as one of the official event sponsors and operators.

And it was during this time the company first observed a shift in consumer behavior that signaled the beginning of online retail potential in the country.

“People would email us or contact our Facebook page to ask if we were able to deliver the SEA Games souvenirs to their homes,” said Win. “At the time, we didn’t have the resources to do so and didn’t think that our Myanmar people would be interested to shop this way that early.”

Fair to say so considering only 1% of its population was connected to the internet only a few years back.

RGO, now rebranded to rgo47, decided to launch its online channel in April 2014 — the year that marked the country’s “Mobile Revolution” when mobile penetration jumped to 83% in only five short years.

Through its ecommerce channels to this day, the company continues to sell its most popular category: fashion apparel that includes everyday apparel, sportswear, shoes, and bags as well as its most recent category additions: cosmetics, kitchen appliances, and electronic and home office goods.

A uniquely Facebook-first market  

Given Myanmar’s reputation for being a Facebook-first country, the company set up a Facebook page and website as its first online channels.

“Facebook is very integral to the Burmese daily life that it’s almost useless for us to have a website,” said Win “I’d say 80% of our transactions come from Facebook.”

Myanmar ecommerce market

rgo47’s main Facebook page

According to Win, a native Burmese herself, a majority of consumers in the country require a personal touch, which usually means human interaction while placing their orders.

To cater to this need, the company employs 42 telesales personnel – out of 122 employees – to communicate with customers through phones and chat applications including Facebook Messenger, and the country’s favorite, Viber.

Win is trying to lessen its reliance on a labour intensive transaction process and anticipates a change in consumer behavior. The company released its mobile application earlier this May, already generating 11,000 (iOS) and 72,000 (Android) downloads.

However, even with this initiative, Win admits that shoppers still prefer the company’s Facebook page, pretty evident as the rgo47 page holds the largest audience in the country.

Myanmar ecommerce market

The company has the largest Facebook audience in Myanmar, leaving behind even earlier player Rocket Internet’s Shop.com.mm and Kaymu

Evolving Burmese online shopping behavior

A preference for Facebook is not to say that the Burmese are resistant to change.

While cash-on-delivery (COD) was the most preferred payment method based on rgo47 records last year, the company saw a shift to more than 50% of its orders now being processed via other channels such as bank transfer and Wave Money – Myanmar’s top mobile financial service providers.

Although a step in the right direction, Win believes the country’s lack of ATMs can cause customers to travel long distances in order to complete a payment and has unfortunately resulted in many canceled orders.

Aside from low payments infrastructure, the country’s addressing system also presents the last mile challenge. While most of its customers reside in big cities such as Yangon and Mandalay, the company has seen an increase of orders coming from rural areas where the drop off locations are difficult to find.

“Outside of Yangon, it is really hard to find the address for customers. That’s why most ecommerce companies in Myanmar still need to give every customer a call to confirm their orders and exact location,” explained Win.

While Myanmar’s ecommerce challenges are not uncommon, Win says customers are loyal, especially after companies have proven their reliability.

More than 30% of rgo47’s monthly transactions come from returning customers.

Win believes that the reason they have such a high retention rate is because her company constantly seeks ways to cater to customer needs.

“Customer satisfaction is the only metric that really counts for us,” said Win.

Customer-obsession seems to be working as the company is currently experiencing two-folds growth in its annual number of transactions and expects volumes to increase as more Burmese pick up online shopping habits.

Possibilities for the future

Despite the hardships that come with nascent markets like Myanmar, Win feels optimistic about the possibilities yet to be explored in ecommerce and its potential impact on communities.

A big determinant of ecommerce success in the country rgo47 believes is working together with experienced ecommerce firms from other markets to learn and apply their best practices.

Win also encourages foreign players to get their hands dirty and enter the market while it’s still early to reap the most benefits.

“The Myanmar people are smart and very curious about new tech experiences,” says Win.

“Many companies hesitate to enter Myanmar because they think the people or the market is not ready but if you’re waiting until they’re ready, it means you’re already too late.”

THE BACKGROUND

Japanese-based fast-fashion designer, manufacturer and retailer owned by Fast Retailing Co., Uniqlo has been providing “made for all” wardrobe staples to global citizens since September 1974.

Unique Clothing evolved into ‘Uniqlo’

Feeding on the thriving minimalist culture in Japan and need for closet essentials around the world, the fashion brand’s net sales came to $15.7 billion, up 6 percent from the previous year. Uniqlo has long associated itself with affordable clothing that speaks volumes to the Japanese values of simplicity, quality and longevity.

As GQ commented, “even when the Japanese retailer goes for hype, it doesn’t ever get weird,” following a collaboration the company did with French designer Christophe Lemaire that bore gray hoodies and white sneakers.

The rainbow array of t-shirts, big name collaborations and ever fresh S/S, W/F collections seem to be a hit as Uniqlo has 834 active stores around the world (data from June 2017). Most are in Japan, but other popular locations include the US, France, Singapore, Malaysia, the Philippines, China and Taiwan.

THE CHALLENGE

The company made headlines last year after reports revealed that the brand was struggling in the States – a forecast of roughly $36.31 million impairment loss on its US operations in the six months through August.

Bloomberg also reported that Fast Retailing Co. Chairman Tadashi Yanai cut Uniqlo revenue target by 40 percent to 3 trillion yen by fiscal 2020. Analysts attribute the more realistic predictions to the weakened yen, certain cultural barriers and most importantly, the rise of online players.  

eIQ Brand Series

Drop of Fast Retailing Co (parent company of Uniqlo) earnings. Source: Bloomberg

Other fast fashion brands such as H&M and Zara have also given Uniqlo a run for its money with aggressive market expansion, high product turnover and strong online presence. It means Uniqlo needs to keep up and the company knows it.

THE INNOVATION

“We need to be fast,” said Chairman Yanai. “We need to deliver products customers want quickly.”

Despite both being fast-fashion companies and having a similar production strategy, Uniqlo and Zara are still vastly different.

“Zara sells fashion rather than catering to customers’ needs,” he said. “We will sell products that are rooted in people’s day-to-day lives, and we do so based on what we hear from customers.”

Not only has Uniqlo vowed to increase clothing production, it has also focused rigorous interest on emerging countries.

Rumours arose a few weeks ago regarding Uniqlo holding recruitment days in Ho Chi Minh City – a market already occupied by fast fashion labels such as Zara and H&M, the latter announcing a store opening later this year.

Uniqlo was also the first in Japan to implement a ‘SPA’ model – short for “specialty-store retailer of private label apparel” meaning it encompasses every aspect of the business, from design, production to the final sale.

This gives the company the ability to test new in-store technology such as attaching radio-frequency identification (RFID) tags to all products so the store system can identify which items need restocking and free up time for sales clerks to tend to customers.

Bold marketing initiatives and branding included its partnership with Muslim fashion designer Hana Tajima, to naming world professional wheelchair tennis star Gordon Reid as a global brand ambassador.

Uniqlo winter collection ‘17 by Hana Tajima.

The company also allocates marketing budget to offline pop ups in premium malls. An example is a mini-fashion in Bangkok on July 12 promoting the brand’s new styles of denim.

Uniqlo fashion show at EmQuartier shopping mall in Bangkok to promote its new denim styles.

Uniqlo fashion show at EmQuartier shopping mall in Bangkok to promote its new denim styles.

Uniqlo is declaring to audiences around the world that it’s not afraid to stand up for a cause.

THE STRATEGY

As reported by Nikkei Asian Review, Masanobu Kusaka, previous manager of Uniqlo’s Fifth Avenue store in New York in 2015, realized that Uniqlo’s true rivals were somewhere else. He also witnessed the sudden closure of some of those shops. The culprit? Online retailers.

Kusaka began by improving the company’s existing digital assets starting with the app first. His team added functions that displayed the user’s purchase history and recommended matched clothing sets.

The company’s online sites have also expanded their product sizes – a huge limitation for brick and mortar stores – and offered XXXL to accommodate Americans.

Uniqlo also focuses on upholding a strong omnichannel strategy across its retail footprint. The company plans to open over 200 stores in China and Southeast Asia alone as the company reported same-store sales in Indonesia, Thailand, the Philippines and Malaysia posted double-digit growth in the first half.

Chairman Yanai hopes that customers will find convenience from the company’s new service where shoppers can visit any Uniqlo store, get fitted for a particular item of clothing, order it online and have it delivered to their homes straight from a warehouse.

“The ability to provide anybody, anywhere, anytime with the ultimate, high-quality day-to-day clothing will set us apart,” he said. “We want to deliver products that customers want quickly. That’s why it’s Fast Retailing.”

THE FUTURE

Chairman Yanai, Japan’s richest man, said in April 2016 he wants to expand Fast Retailing’s ecommerce worldwide, with an initial target for online sales to make up 30 percent of total revenue, up from 5 percent currently.

Given the rising popularity of online retail and the brand’s quick strides to innovate, it doesn’t seem too farfetched.  

Fast Retailing Co. Chairman Tadashi Yanai