HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES
- INFORMATION TECHNOLOGY
FACULTY OF INTERNATIONAL BUSINESS ADMINISTRATION- ---------***--------
E-COMMERCE FINAL ASSIGNMENT
Topic: Advertising strategies for an E-business Fashion Industry Name: ID Students: Lê Trần Hương Nguyên 21DH123241 Lại Thị Khánh Như 21DH123535 Nguyễn Minh Thư 21DH123367
Instructor: Pham Thi Mong Lanh HCMC, 08/2023 Executive Summary
This report examines the advertising strategies of one of the most popular
garment industry – Uniqlo to indicate how can they obtain the efficiently to raise the
brand reputation and spread the satisfaction to people of all ages. Uniqlo has
participated in Vietnam’ fashion industry since 2019 with the aim to bring high
quality life wear in affordable prices. The report will analyze how a fashion brand
apply advertising strategies to maintain their quality and high coverage all over the
world. This helps us figure out what strategies they decided to apply in Vietnam
market. Previous studies have indicated that Uniqlo use many social media to
advertise and is one of the searching engines for people . The main purpose of
Uniqlo is totally not rushing other fashion competitors, they want to spread the
campaigns and advertise in their unique way including using alternative spaces in
store, finding brand ambassadors, using SEM – search engine marketing or
collaborating with famous designers. Therefor, this report recommends Uniqlo to
have appropriate solutions to fit the customer demand in Vietnam by focusing on
what customers prefer most. Through the analysis of Uniqlo’s advertising
campaigns, it can have a greater impact on their marketing purposes. Table of Contents 1.
Introduction....................................................................................................... 1 2.
The Company....................................................................................................1 2.1.
Analysis of Uniqlo’s strategic position......................................................1 2.2.
Determination of their competitive strategy.............................................3 3.
Market selection................................................................................................4 3.1.
Justify the country selection through PESTLE........................................4 4.
Selection of relevant segmentation criteria.....................................................8 4.1.
Development of appropriate segments......................................................8 4.2.
Screening of segments................................................................................8 5.
E-commerce strategies for the market............................................................9 5.1.
Key product/service decisions....................................................................9 5.2.
Specific e-commerce strategies................................................................10 6.
Conclusion and recommendations.................................................................10 7.
References........................................................................................................ 10 1. Introduction
Before Uniqlo was launched, Mr Tanashi Yanai owned himself 22 branches of
clothing shops. When he became the company president in 1984, he launched a clothing
shop called Unique Clothing Warehouse and now is Uniqlo – a brand of producing casual
clothes for Japanese people in Ube, Yamaguchi Prefecture, Japan. Uniqlo is one of the
fastest development in various market. The “ Uniqlo Fleece”, the company’s different
product line, was introduced in 2001, marking an important point moment for Uniqlo.
Because of the fleece’s enormous popularity in Japan, the business swiftly widened its
selection of goods to include other casual clothing items like T-shirts, jeans, and
sweatshirts. Nowadays, Uniqlo has expanded its product line and innovated over the last
few years. To provide comfortable and useful garments, the company has concentrated on
creating new materials and technology. As part of this growth, Uniqlo also offers
accessories, outerwear, and activewear.
It also holds a significant position in the world and its reputation constantly develops
with more than 2,200 stores in 25 countries. . It eventually becomes one of the top 5 retail
fashion brands such as H&M, Zara, Gap, Uniqlo, Pull and Bear. Uniqlo is known as
producing high quality clothes for all customer segmentations with a motto called :”
UNIQLO-MADE FOR ALL” and attach to its basic, functional and affordable. The
company not only wants to create good quality designs but also suitable for many
different styles. What the company aims at is the consumers can use it in the most optimal
way, not just following trends like the other fast-fashioned brands. The business is also
well-known for its knit-wear which is made from high quality materials in suitable prices,
attracting a great deal of potential customers .
Uniqlo started appearing in Vietnam in 2019, and it has widely opened to 9 outlet stores
from HCM city to Hanoi but no online store was distributed through online channel since
then. In order to increase the convenience for customers, Uniqlo decided to conduct sales
method through omi-channel in 5/11//2011, which customers can choose home-delivery
or ordering online and receiving items at the store to create a seamless shopping process
between the two channels. This biggest online store can reach to over 15000 products.
The diversity of designs and sizes is the big advantage of this fashion brand. Uniqlo also
builds their own version for mobile phones to widen alternative experiences for
customers. All in all, Uniqlo online stores will appear in two different versions: website
and application. Nowadays, online retail is the developing field in Vietnam with a rate of 70% of population. 2. The Company 2.1.
Analysis of Uniqlo’s strategic position Strengths:
• Possess a clear strategic vision: Clear market entry strategy is the foundation for
the brand to build success and make it easier for the brand to expand and build new
source of revenue by diversifying risks. This brand concentrates on designing
simple outfit for daily life of people. With a commitment to low prices and good
fabric quality, Uniqlo clothing is mass-produced and focus on the most simple
clothing that everyone needs. Not similar to other competitors, they frequently
research on fashion market to promptly catch up with the trends but Uniqlo still
maintain its simple and improve the quality. 1
• Improvement- based communication: Instead of catching up with fashion trend,
they keep focusing on researching and developing unstoppably in product
innovation. What they aim to do is constantly improving on its technology to
produce new innovative fabrics. When Heat Tech - one of the most popular version
of fabric which is made from a material retaining bioheat, helping to keep warm
without being too thick. This technology helps convert moisture from the body into
heat, keeping consumers comfortable during long winter. When it was first
produced in 2003, 1.5 million items were sold. The advertising strategy at that time
was a great success. In addition, Uniqlo’ s innovation does not follow the fashion
market but try to bring what customers need, which attracts a great deal of customers all the time.
• Great purchasing experience: Whether it’s the experience of purchasing online or
in-store, the company still does its responsibilities well. If purchasing online,
customers can check the items out by themselves or online staffs will help them
search and check the availability status of products at the store. Or after ordering
products online, customers can choose to receive their items via Click & Collect at
2 stores I Uniqlo Vincom Landmark 81 ( Ho Chi Minh city) or Uniqlo Vincom
Pham Ngoc Thach ( Hanoi). If customers purchase in-store, they will be warmly
welcomed and the staffs are willing to support anytime. •
Gain success in collaborating with international trademarks: Besides designing
clothes for daily lifestyle, this Japanese brand also attracts customers with
collections in collaboration with many designers such as: J.W Anderson,
Alexander Wang, or youthful UT! me. Uniqlo x KAWS is the most successful
collaboration of the Japanese popular brand. The products quickly sold out after a short time on shelves. Weaknesses:
• The company makes apparel that reacts to the weather. The fact is that aspect was
created exclusively for the Asian market and lacked global adaptability meant that
it was effective in Asia but failed in the US. If H&M follows market trends by
constantly updating the newest models, the shop always feel new. In contrast to
Zara, which has a strategy of “copying designs” from high-end fashion businesses
from the moment they are launched. It seems to be a disadvantage for Uniqlo
because it is following what GAP once failed to innovate. US customers always
want the fastest fashion trends, especially with this extremely harsh fast-fashioned industry.
• The corporation is having serious issues growing its supply network. Additionally,
consider the fact that internet retailers do poorly in comparison to their competitors. Opportunity:
• Great potential in Vietnam retailed fashion market, Vietnamese people are
becoming more concerned with their appearance and improving it, their spending
power for fashion products is rising as well. Vietnamese customers continue to be
drawn in by the increasing number in global fashion items in various areas.
• Fast development of e-commerce in fashion industry, occupying 8,57% of
worldwide population, this area promises to have great consumption for 2
contribution of e-commerce industry. In addition, Southeast Asia area attracts
many big businesses around the world. According to the Department of E-
commerce and Digital Economy, Vietnam’s E-commerce grew impressively in
2020 with an increase of 18%, a market size of 11.8 billion USD, and is estimated
to account for 5.5% of the total retail sales of consumer goods and services nationwide.
• The business may utilize a strong brand image to increase sales. The business can
sell its brand through viral advertising and digital advertising to reach its target market. Threats:
• Intense strong competition with other brands such as: GAP, Zara, H&M,…
• Rebranding is getting easier
• In general, the business has some competitive advantages and some threats. Thus,
they have to take advantage of the opportunities and focus on removing threats and weaknesses. 2.2.
Determination of their competitive strategy
ZARA, H&M, and GAP are three of UNIQLO's usual competitors on the market
nowadays. The three brands mentioned above have been placed in the table of business models below: ZARA H&M GAP Strengths: They always
Strengths: Targeting mainly Strengths: ashion brands play to their advantage –
young people, H&M is not are focusing on pursuing what started as an average afraid to use social media emotional marketing copier has turned into a marketing as a strategy to strategies on digital leading fashion brand in bring updated messages platforms. “Gift the
retail in the world. All Zara and products to young Thought” is a short film products are not only people. From Facebook, about a boy's growing up diverse and readily Instagram, Twitter, journey under the care of a
available, but are also "very Pinterest to Google, H&M single mother. For this sensitive" to the weather: is everywhere with a very campaign, Gap collaborates as soon as it starts to get effective level of with agency Johannes
cold, they are ready to have interaction with customers. Leonardo, but unlike the their coats, while
H&M has a dedicated care previous two festivals, the espadrilles and bikinis. unit to listen to feedback. ads will not be broadcast available in time for They are ready to respond on TV. As an increasing
summer. This is the reason to comments to give more number of consumers shop that many other high-end information or explain online, meanwhile, digital brands can't keep up. when customers want. media can be more cost- Thanks to the push in effective for marketers than On the App Store and CH online brand promotion, traditional advertising. The Play, ZARA is ranked ten
H&M has risen to be in the video was released on
thousandth and ranked 47th top 25 leading fashion November 1 on Gap's in terms of purchases. brands in the world. social channels, including According to some Hulu, Vevo, Facebook 3 comments and personal Compared to ZARA's Watch, Youtube. Launching
experience, this application application, H&M's the campaign after is very easy to use, can application has less than Halloween is a strategic
shop online at any location 2.2 thousand downloads move for Gap to reach without time, suitable for and is rated 4.8 out of 5 consumers right before all tastes. stars. In terms of shopping Black Friday. At this time, rankings, it's higher than the brand is also under a lot The "Click & Collect" ZARA, H&M is ranked of pressure when its concept has brought two 27th. potential subsidiary, Old most important benefits in About H&M's vision "Our Navy, will "take off" in the
modern people's lifestyle to vision is to lead the change upcoming 2020. save time and increase towards circular and convenience, namely: renewable fashion while Compared to the Buyers can fully enjoy the being a fair and equal application of ZARA and joy of online shopping, company"; As for the H&M, the popularity of
they do not have to wait for mission "Our mission is to GAP is less. GAP is an the package to arrive at drive long-lasting positive international fashion brand
home, but still can actively change and improve living from the US with diverse arrange the time to go to conditions by investing in fashion products for both the store to receive the people, communities and men, women and children. goods; If you're not innovative ideas" GAP is one of the satisfied, no longer have to pioneering brands pursuing go through the hassle of re- sustainable development packing clothes, contact the goals. store and notify the return, call a delivery service and wait for a refund. With the new concept, all they need to do is return the clothes at the FMCG hire email counter. 3. Market selection 3.1.
Justify the country selection through PESTLE
The external macro-environmental substances that could be having an effect on a
business or market are explored employing the strategic management framework defined
as a PESTEL investigation. PESTEL is an acronym for:
• Political factors: These consist of legislation, the laws of the nation, political
stability, and other political forces that might have an influence on the business economy.
• Economic factors: Handle the present condition of the marketplace and its habits as
they apply to an organization's operations, profitability, and future.
• Sociocultural factors: Include social and cultural features that might affect buyer
decision-making, standard of life, population growth; and market trends. 4
• Technological factors: Emphasize on developing and utilizing new ideas,
technologies, and trends that may exert a positive effect on an arena within the
market or a particular business.
• Environmental parts: Explain environmental and ecological issues that may have
an influence on how an organization functions along with its decision.
• Legal factors to consider: Take a mention of regulations and statutes that govern to companies and industries.
Political Factors Affecting Uniqlo
• Trade Policies: Fast Retailing Co., Ltd., whose runs Uniqlo, is an international
corporation has operation beyond several nations. The company's operations could
get dependent on the political relationship between Japan, where its corporate
headquarters include, and the other countries wherever it do business. For example,
business should adjust to tariffs, import/export laws, or trade policies that might
have an immediate impact on Uniqlo's supply chain, expenditures, and costs.
• Political Stability: The political atmosphere in each country where Uniqlo
performs organizations receives an immediate effect on the company's reputation.
Politically unstable setting can cause issues with supply chains, give up limits to
market access, and even invested regional authorities brands and colleagues in chance.
• Inflation Rates: As one consequence of escalating labor and raw material costs are
borne, Uniqlo's clothing will eventually cost greater. It can have a direct effect on
Uniqlo's profit margins if these higher costs aren't passed on on to purchasers.
• High unemployment rates could affect the power of customers to spend and
customer appetite for Uniqlo's items in question. On the other side by side an
enormous swimming area of potential workers might be made available by high
levels of unemployment, leading to down labor costs.
• Interest Rates: If Uniqlo necessitate money it borrowed for operations or
expansion, interest rates might be given a chill on the price it pays. Higher interest
rates can make borrowing costs higher and have an undesirable effect on profitability. Economic Factors
• Economic Growth: Consumers spending capacity may be impacted by the rate of
economic growth in nations where Uniqlo run business. Contrary to this, during
conditions of economic recession, shoppers may limit what they bought, which might affect Uniqlo's sales.
• Exchange Rates: As a globally operating company, Uniqlo works in a broad
spectrum of currencies. Exchange rate fluctuations have a big influence on salary
levels, costs, and revenue. For instance, the cost of contents sold outside of Japan
can grow if the yen enhances versus other currencies, which could provide a hold
according to Uniqlo's profitability.
• Inflation Rates: As caused by of high labor and raw material the costs, Uniqlo's
product might eventually cost additional. It could make a direct effect on Uniqlo's
profit margins if these increases in costs aren't passed on on to clientele.
• High unemployment rates may decrease the ability of consumers to spend and the
demand for Uniqlo's items. On the other side, an enormous array of job candidates 5
could potentially be become open by a high unemployment rate, leading to lowering labor costs.
• Interest Rates: If Uniqlo needs money which it borrows for operations or
expansion, interest rates could be having a direct effect on its costs. Higher interest
rates could render borrowing costs greater and have an adverse impact of profitability.
• Consumer Confidence: Retail sales could have significantly influenced by
consumer confidence, an important metric for the economy. Consumers are more
likely to spend when consumer confidence is brave, which could improve Uniqlo's
sales. Consumers are likely to cut down on spending when consumer confidence is low, these might impact sales. Social Factor
• Consumer Attitudes and Behaviors: The manner in which of Uniqlo's customers
may have a big impact on how well it does. If people in a certain area select cheap,
and high-quality apparel, it may does well. However, alterations in patron
preferences or fashion trends may have disadvantages.
• Demographics: Defects in the population's age, gender, income, and other
characteristics may have an affect on the demand for Uniqlo's wares. For instance,
an older population might have different dress habits than the younger one.
• Conduct and social task: Customers are more aware of ethical matters and social
responsibility in the products they choose. Consumer decisions are often
determined due to variables including fair trade, ethical sourcing, working
conditions, and product into force. To retain a favorable brand image, Uniqlo needs
to ensure to keep up with these objectives.
• Cultural differences: Uniqlo produces goods in quite a few of economies, and such
variations in culture might affect fashion patterns. What succeeds well in Japan
might not always do well in the United States, Europe, or different areas of Asia.
For the marketing and product development schedules of Uniqlo, an understanding
of these exceptions is necessary.
• Health and Well-Being Statistics: As the relevance of health and wellbeing is
becoming more widely recognized, there has been an extensive action in the
market toward commodities that support this way of life. For instance, this societal
change is directly responsible for the growth of sportswear and the athleisure movements.
• Lifestyle alterations: The decisions people make is clothes may vary as the result
of shifting lifestyle patterns, such as the rise in remote work brought on by the
COVID-19 pandemic. In order to meet consumer demands, Uniqlo needs to adjust tthese changes. Technological Factors
• E-commerce as well as online shopping: retailing has been severely affected by the
emergence of e-commerce. Uniqlo has opportunity to expand its online sales,
which could expand its base of customers and boost its market share. However, it
must make sure to provide a fluid and user-friendly buying experience considering
it participates with several other online merchants. 6
• Supply Chain Management Technology: Logistics, inventory control, and supply
chain management technologies may make Uniqlo's operations more valuable and
cheaper as well. The organization can more effectively track its inventory and cut
expenses with the use of intricate forecasting and demand estimation new technologies.
• Technology in Manufacturing: the fabrication of Uniqlo's products may be
impacted by new technology. Innovations in fabric technology or manufacturing
processes may result in higher-quality goods, more environmentally friendly
manufacturing procedures, or decreased costs.
• Mobile Technology: The rise of mobile technology has influenced consumer
behavior. For website that attracts clients who prefer to purchase via smartphones
or tablets, mobile applications are essential. In order to meet these client demands,
Uniqlo would need to make investment in mobile technologies.
• Artificial intellect and data analytics: both of these innovations can throw light on
consumer behavior, market trends, and company activity. Via the identification of
new fashion patterns and the customization of the shopping experience for specific
prospects, this can help Uniqlo in making smarter business choices.
• Social media and digital marketing: Technology is also essential to marketing and
communication with prospects. To interact with customers and advertise its
products, Uniqlo has to be abundantly represented on social media and employ
digital advertising strategies.
• Virtual and augmented reality are starting to play a larger role in the retail sector
through the provision of simulated changing rooms and shop experiences. The
integration of these technologies might offer Uniqlo a competitive edge. Environmental Factor
• Climate Change: There’s various manners in which climate change impacts the
fashion sector. Purchase choices by customers and apparel preferences might be
impacted by changing weather patterns. Also, it could cause issues with Uniqlo's
transportation routes, particularly if storms evolve in incidence.
• Sustainability: Assistance with companies that are practicing sustainable
production is a growing consumer trend. Uniqlo, like other retailers, is under
pressure to expand the environmental health of its operations by hindering waste,
increases in recycling, and exploiting environmentally friendly substances in all of its products.
• Carbon Footprint: To slow pace climate change, governments all around the globe
are enacting severer regulations on emissions of carbon. If Uniqlo is seeking to
decrease its carbon footprint and fulfill by all of these rules, it could need to make
funds invested throughout more eco-friendly, renewable energy sources ineffective instructions.
• Supply Chain: This Uniqlo supply chain entails a number of environmental
considerations, from sourcing raw materials through production, transport, and
product disposal. Such behaviors may have a detrimental effect on Uniqlo's
operations and reputation given environmental problems such as water pollution,
deforestation, and habitat assault. 7