When renowned global research agency Millward Brown compiled its BRANDZ Top 100 Most Valuable Global Brands 2012 report, the company summarized why many of today’s businesses either hoping to expand their international reach or join the global battleground for consumers are eyeing Brazil as a promising venture: “Expanding middle class drives brand growth.” The causes of this phenomenon certainly include economic ones – such as improving family fortunes, a rise in disposable income, and a growing economy to meet all the new demand - but just as important are mindset shifts, in terms of how Brazilians see themselves relative to each other, and to the rest of the world. Though "“everyone wants to dance with the new [Brazilian] middle class", such dramatic changes have transformed how businesses should go about doing so. For UNIQLO, a Japanese casual apparel brand who's already achieved great success in its home country and the United States, the numerous opportunities in Brazil can't be ignored, but they can't be tapped into by simply replicating previous campaigns. This presentation, one of the deliverables for my International Advertising & Promotions final project, proposes a marketing strategy the fast fashion retailer should follow in order to enter successfully into the BRIC nation.
1. The Next Big Breakthrough:
UNIQLO Pursues Brazil
The Brazilian Market Offers
Promising Growth Opportunities for
Successful Growth for Fast Retailing Co., Ltd.
CEO, President, Chairman Tadashi Yanai of FAST RETAILING
“The Fast Retailing Group generated gains in both sales and profit in fiscal 2012 from September 2011 through August 2012. While income fell marginally at UNIQLO Japan, income for the Group as a whole increased as UNIQLO International operations made great progress in both established and new markets, and the contribution to profit made by our low-priced g.u. casualwear brand leapt dramatically. Personally, I believe that our drive to promote globalization, strengthen Group management and refocus on entrepreneurial values is largely responsible for this impressive financial performance.” (http://www.fastretailing.com/eng/ir/direction/message.html)
“a modern Japanese company that inspires the world to dress casual”
originally a division of Fast Retailing Co., Ltd – became own operating entity in 1984 (same year first store was opened in Hiroshima City)
functions as designer, manufacturer, and retailer – SPECIALTY STORE RETAILER OF PRIVATE LABEL APPAREL – “controls all stages of the business – from design and production to final sale” (www.fastretailing.com)
oversee all operations (a competitive advantage, especially in the fast fashion industry) – just-in time delivery, cost-effective
Demographics & Psychographics: 18-24 years old, male and female, all ethnicities, urban, middle-class, want fashion, quality AND price, care about peers/celebrities, wired (FB, Twitter, smartphones, etc.), stylish and care about trends, CASUAL, active, fun-loving and modern…
Uniqlooks.com: the UNIQLO FASHION COMMUNITY
From left to right:
Elora Joshi
Ning Chiou
Kiss Chiang
Four styles with UT: Relaxed street style, folk style, street fashion and Simokitazawa style.
Ching Hsiung Chu
I love Jazz music so I chose the collaborated UT with CONCORD MUSIC GROUP. Wearing it with casual cricket pants, colorful summer suite and BIRKENSTOCK is my perfect outfit for a cup of coffee and some Jazz music in an easy and comfortable summer afternoon.
SO WHY IS UNIQLO SO WELL-POSITIONED TO “GO GLOBAL”?
MADE FOR ALL slogan – “clothes that transcend all categories and social groups” – doesn’t matter your ethnicity, gender, age, etc.
SIMPLE yet UNIVERSAL clothes – yet rooted in JAPANESE ORIGIN
AFFORDABLE but WELL-DESIGNED – changing the world, the future – a LIFESTYLE
NUMERICAL EVIDENCE OF PROMISE OF CONTINUED GLOBAL EXPANSION: in fact, global growth has so far been successful…
EVERYONE IN FASHION IS FACING PRESSURES TO GO GLOBAL as of 2012: “Zara and H & M are still dependent on Europe for more than half of their sales, while Gap focuses 68% of its activity in the United States. Last year, the benefits of Fast Retailing, Uniqlo's parent company, they have been sealed by its poor profitability in Japan, where the brand 80% of its sales. The Japanese group has up its sales targets for this year, but its growth (14% to EUR 9 billion) will come mainly from abroad.” (http://onlinenewspulse.com/forced-globalization-for-the-giants-of-fashion/)
“expanding middle-class drives growth” (BRANDZ TOP 100 2012 REPORT)
ALSO, “several powerful business and trade organizations are also helping to stimulate Brazil’s economy via apparel jobs and industry opportunities” (http://www.apparelinsiders.com/2011/12/a-fashion-frontier-expands/)
ALSO, in general, tariffs aren’t that prohibitive
ALSO, “…fashion also has a special place in Brazilian culture… it’s something of a national pastime and a topic of everyday household conversation, not just a luxury of the urban, privileged classes… Brazilians have also long had an appreciation for aesthetics and quality.” (http://www.businessoffashion.com/2010/08/inside-brazils-booming-fashion-industry.html)
“Brazil, he notes, is more creative (UNIQLO’s creative!) in its approach and more specialized, with apparel exports centering on beachwear, sportswear and women’s dresses… and there is an emphasis on sustainability: many of the fabrics that Brazilian designers devise and implement are made from organic and recycled materials” (apparelinsiders.com)
…NOTE: this means that UNIQLO needs to work on its S/S lines – right now, known for its high-tech winter-wear products (HEATTECH example) but overall, if UNIQLO were to work on
expanding its expertise/production into clothes for the warmer seasons, this promises YEAR-ROUND CUSTOMER LOYALTY OVER THE WHOLE WORLD – so why not start w/ BRAZIL,
where over 90% of the country enjoys a tropical climate?)
INCREASING consumer purchasing power – demographics/psychographics of this growing middle-class population fits perfectly into the demographics/psychographics of UNIQLO’s current customers
overall ‘casual’ and liberal culture of this Brazilian middle-class will love UNIQLO’s clothes!!!
specifically, target RIO DE JANEIRO as geographic region of focus (why? despite the fact that SAO PAULO is Brazil’s premier business center/hosts South America’s annual Fashion Week show, its culture is more family-oriented – the landscape is more residential, vs. RIO’s liberal-feel of open beaches and open sidewalks where beach-goers venture and peruse stores in malls, many still adorned in their beach-attire…)
- if UNIQLO wants to pursue CEO Tadashi Yanai’s to get UNIQLO to be the “global #1” in this industry, BRAZIL would be important addition to international presence…
MORE ON RIO:
LOTS OF TOURISTS – more potential customers!
CASUAL CULTURE/liberal – the old besides the new – niche stores and non-high-end motels, older more conservatively dressed people walking besides young couples in swim gear…
NATIVES are proud of their culture, while TOURISTS come to experience it… aka LOTS OF PEOPLE aka LOTS OF CUSTOMERS!!!
usually shop at malls – malls don’t carry a lot of American/foreign name brands, mostly local ones – adherence to national-pride, identification w/ Brazil (care about appearance, personalize and put thought into outfits…)
lot of Portuguese-named brands in malls, but young Brazilian is still WIRED and growing increasingly aware/attracted to foreign brands (enter: UNIQLO) – locally-named leather bag stores, rather than big, pricey names like LV (enter: UNIQLO – not a high-end luxury retailer like LV or D&G, but casual, fast-fashion that’s still on top of trends!)
understand/speak English, but usually Spanish/Portuguese
OPPORTUNITY (lack of affordable options): need something to fill in the gap between HIGH, EXPENSIVE FASHION and CHEAP, LOW-END FASHION
“…another interesting feature of Brazil’s domestic market: “Unlike [in] Europe or the US, where there are many high-street options like Zara and Mango, in Brazil most brands fall into two extremes: they have very low-profile brands like C&A, where you can get things of rather low quality at a really cheap price and, on the other end: designer brands, like Maria Bonita and smaller independent labels that offer good quality and design at a high price point.” …this means is that the consumer who wants good design — and that is the majority of middle and upper class Brazilians — has little choice but to buy from designers brands… the lack of affordable fashion options has forced consumers to spend on, and thereby support, serious domestic fashion labels.” (http://www.businessoffashion.com/2010/08/inside-brazils-booming-fashion-industry.html)
ANOTHER ALIGNMENT TO UNIQLO’s ALREADY-ESTABLISHED/CURRENT BUSINESS MODEL: (specifically, SPA) –
“…what sets Brazil apart in the fashion scene? Diversity in prints, colors and patterns, creative design, versatility in production, sustainability, and knowledge at every link of the chain.” (http://apparel.edgl.com/case-studies/In-Brazil,-Booming-Economy-Boosts-Apparel-Business75616)
COMPETITORS
TWO MAIN ONES (Gap and H&M) don’t have physical stores in Brazil – but Gap does sell via e-store
ZARA, on the other hand, has had presence since 1999 – out of its 1,671 total stores, 34 of them call Brazil home (maybe UNIQLO should look at how ZARA entered/has been so successful – i.e. “Zara is a phenomenon in C. America for the same reasons as in the rest of the world: stores are stocked w/ new merchandise 2x a week, which stimulates clients to go visit several times throughout the year…” (“Spain’s Zara Finds Fans Aplenty in Latin America’s Malls”)) most Brazilians shop in MALLS, this means UNIQLO can save money on opening up free-standing single locations, a pricier investment than simply renting storefront space in a mall…
…and a LOCAL SUCCESSFUL COMPETITOR: “OSKLEN”, sportswear company founded back in 1989 – built image around relaxed style of Rio, currently has 63 stores in Brazil and 10+ abroad
MY IDEA: There are three main ways for UNIQLO to enter Brazil effectively (in order of increasing expensiveness of an investment):
(*remember: UNIQLO is great a churning out promotional campaigns seasonally, is DEDICATED TO MARKETING, infuses both selling tools and products w/ LATEST HIGh-TECHNOLOGY…) utilize UNIQLO’s existing expertise in high-tech communicatory platforms to engage the young Brazilian shopper: UNIQLO’s WEBSITES (interactive, fun, innovative, entertaining…)
numerous creative undertakings (*and Brazilians LOVE creativity!) – projects inviting designers to design exclusive collections, UNIQLO Innovation Project (“Music-Dance-Clock”), UNIQLOCK Project (DL screensavers!), GRAMEEN UNIQLO (‘social business/sustainability’ – and Brazilians CARE about WORLD ISSUES, i.e. POVERTY, ENVIRONMENTALISM!)
also, just launched U.S. e-store site – aka UNIQLO has the money/knowledge to work on Internet platforms of communication!
2. TV ads during Brazil’s popular TELENOVELAS
(from Cultural/Economic paper): “…essential to Brazilian pop culture are TELENOVELAS… ‘dramatic soap operas’ which ‘not only grip the nation, but are sold to 120 countries around the world’ (bbc.co.uk)”
(Carlos Magalhaes, TV director): “…about 30 years ago, Brazil was a lot of countries… I think TV has unified it… we used to be many diff. countries… we speak the same language… we know we’re a country now…”
this is what Brazilians are watching - *ads should utilize famous BRAZILIAN FACES/CELEBS (i.e. GISELE BUNDCHEN – not only Brazilian descent, but a renown face in fashion industry in general…) as well as soccer stars (i.e. phenomenon NEYMAR, shown here back in 2011)
3. buying big billboard space during the WORLD CUP at stadium – esp. if held at MARACANA STADIUM (largest in world) – or TV ad space during the World Cup game
- most popular sport is SOCCER (‘futebol’) – Brazilian National Soccer Team has won 5 World Cup victories (everyone watches!) – you get eyes from TV viewers AND fans in the stand…
OTHER METHODS:
other advertising space that can be purchased: fashion magazines, beach billboards, lifestyle magazines, (only form of public transportation is bus or taxi – advertise there?) – in fashion/lifestyle magazines, again, use CELEBRITY FACES (Gisele Bundchen) to cater to Brazilian’s strong sense of nationalistic pride…
go into malls to advertise (that’s where people go to shop!)
*AGAIN: emphasize UNIQLO’s new focus on S/S lines! (swimsuits? Flip-flops?) – otherwise, casual image already working in company’s favor!
*AGAIN: communicate UNIQLO’s overall message of AFFORDABLE FASHION – casual, high-quality, innovative, reasonably priced, PERFECT FOR THE GLOBAL CONSUMER…
*…UNIQLO as a GLOBAL company (since Brazil has national pride, maybe don’t emphasize Japanese origin too much…) – all leading back to:
(projected outcome: SUCCESS)
BRAZILIAN MIDDLE-CLASS CONSUMER (where the country’s experiencing great growth) is ALREADY ALIGNED W/ UNIQLO’S OVERALL BRAND IMAGE – the CHALLENGE is adjusting UNIQLO PRODUCTS TO THE CLIMATE OF BRAZIL, but this CHALLENGE also provides more OPPORTUNITY in GENERAL GLOBAL GROWTH b/c UNIQLO SHOULD BE LOOKING INTO FOCUSING ON S/S APPAREL ANYWAY in order to SECURE YEAR-ROUND CUSTOMER LOYALTY FROM THEIR CUSTOMERS AROUND THE WORLD – and FASHION-SAVVY BRAZILIAN CONSUMER, if he/she approves of UNIQLO’s potential S/S LINES, then this will ENSURE APPROVAL FROM CUSTOMERS AROUND THE WORLD…