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The next Uniqlo?Japan’s second largest apparel group adds to the Chinese market

Niko And…

Niko and…Continue to add to the Chinese market.

Last year Niko and…Less than a year after the first flagship store on the Chinese mainland opened in Shanghai’s Huaihai Middle Road and sparked a frenzy of queuing, the second NIko and…Shanghai was chosen again.

Niko And… 1 1

The second niko and…The main concept store model has been officially opened in Nanjing West Road, Shanghai on December 19. The upper and lower two-floor space covers an area of 1,500 square meters, which integrates the popular lifestyle of young people in Japan in the current season, interesting items, daily groceries, clothing and other products.

Niko And… 2

It is understood that Niko and…It is owned by ADASTRIA, Japan’s second-largest clothing group.ADASTRIA group was originally founded by Tetsusan Fukuda in 1953 as a men’s clothing company in Mito, Ibaraki Prefecture.

Niko And… 3

ADASTRIA group’s key financial figures for fy2020 as at fy2020 (March 1 solstice, February 29, 2020), the ADASTRIA group’s net sales amounted to 222.3 billion yen (about 14 billion yuan).And Niko and… which first entered the Chinese mainland market last year…It is ADASTRIA group’s fastest growing brand, with sales of about 32 billion yen (about 2 billion yuan) in fiscal 2020, second only to GLOBAL WORK, the largest clothing brand under the Group banner.

As of 31 August 2020, NIko and…It has 145 stores worldwide.

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niko and…Fiscal year 2020 Sales

Niko And… 5

The number of ADASTRIA group brands has been profitable for a year, Niko and…The annual sales of the first store are about 100 million yuan

Why, niko and…Success in China?This should start from its tide attribute.

Niko And… 5

Although 70 percent of the products of the brand are self-run clothing brands, the other 30 percent are lifestyle groceries, which are the key to attract young people. For example, the store in Shanghai iv has also launched commodities cooperated with brands such as xVessel and Stanley.And niko and…Merchandise and displays are updated every 45 days.

After opening its first store in mainland China last year, Niko and…The flagship store on Huaihai Middle Road became an instant hit.Even after the closure of the store at the beginning of this year, according to the brand, the store’s traffic and sales gradually returned to normal in April this year, and the store made a profit in June. The daily sales volume during the Golden Week of National Day reached 700,000 yuan, and the annual sales volume is expected to reach 100 million yuan this year.

Niko And… 6

ADASTRIA Board member and Head of Operations, Kawai Kitamura, according to Niko and…Kawai Kitamura, brand head, ADASTRIA board member and head of operations, said niko and…The strategy will be to open a small number of boutiques in China’s first-tier cities, rather than a large-scale shop model.Take Shanghai as an example. According to its plan, in addition to huaihai Road flagship store and Four Seasons Square concept store, only one more basic store will be added.

“We will continue to open stores in big cities, but not as many as Muji and Uniqlo.””Our brand focuses on fashion and happy consumer experiences, whereas Uniqlo and Muji are selling basic goods,” kitamura said. “There is a fundamental difference.”

ADASTRIA reentered the Chinese market a decade ago after failing to try.

Despite being Japan’s second-largest apparel group, ADASTRIA has had little presence in Mainland China, due to the fragmentation of its brand image caused by its multi-brand strategy and its past neglect of the mainland market.

Kitamura Jiahui also frankly said in the interview that NIko and…The late comer to the Chinese mainland market, uniqlo and Muji have been working for many years.In terms of numbers, Uniqlo has more than 800 stores in China, and Muji has about 280.

But the ADASTRIA group actually dabbled in the Chinese market a decade ago.

ADASTRIA launched the Collect Point in China in 2009, while bundling together a number of the group’s brands.Collect Point reached more than 40 stores in China at its peak, but it has been closing loss-making stores since 2017 and has withdrawn from the market, according to online information.

“The Chinese market has been growing rapidly in the past decade. Our brands in the past have not kept pace with the development of the Chinese market. Secondly, the lack of brand strength of these brands has also led to the withdrawal from the Chinese market.Now we’re starting from scratch, hoping to bring niko and…This brand is doing it, and it’s driving the development of the Chinese market.”Kitamura Jiahui said in an interview.

Moreover, Collect Point has not kept pace with the path of e-commerce development in China over the past decade.”The rapid change of Chinese consumers is also related to the development of smart phones. The Internet is not only a shopping scene, but also endowed with the function of communicating with consumers.”Kitamura Jia Hui pointed out.

So, in Niko and…At the same time of the opening of the first store, it has also entered the Tmall flagship store. At present, about 40% of the skus of the online stores have been launched, and the product category will be further expanded in the future.The opening of Tmall flagship store also provides a shopping channel for consumers who cannot experience stores in Shanghai, and paves the way for new stores to enter the next city.

After the success of The Chinese market, the future will also test the waters in Southeast Asia.

It should be noted that the ADASTRIA group has been actively promoting overseas markets in recent years, and although it only returned to the mainland market last year, it has already laid 65 stores in global markets outside Japan, including Hong Kong, Taiwan, South Korea and the US.As of 31 August 2020, overseas markets accounted for about 5.9% of the group’s total revenue.

Niko And… 7

While the ADASTRIA Group’s performance in Japan has been solid, the impact of the outbreak has led to a sharp decline in domestic sales, with only the Chinese mainland and Taiwan experiencing positive growth in the first half of the fiscal year ending August 31, 2020.

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ADASTRIA reported a 27.1 percent decline in sales in its home market in the first half of the fiscal year, due to store closures or shortened business hours.Since the reopening of all stores on June 3, group sales have continued to decline, but by a narrower margin, while online channels have increased by more than 25% year on year.

The policy of going abroad is also related to the saturation of Japanese clothing market.”One is that the number of new people in Japan is decreasing, and the other is that there are too many clothing brands in Japan and the market is already saturated, so in the future unpopular brands will gradually disappear.”Under such circumstances, we hope to have new growth overseas.”

Kitamura said he will continue to expand in Asian markets outside Japan, starting with mainland China.According to its future plan, when Niko and…Sales in Mainland China have reached 2.5 billion yuan, surpassing the brand’s sales in Japan, and it will consider entering the Southeast Asian market next.

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