Uniqlo's top position threatened by local fast fashion brands
A Uniqlo store in Seoul / Courtesy of Uniqlo
By Kim Jae-heun
Japanese casual clothing brand Uniqlo is being chased aggressively by domestic fashion firms like TOPTEN10 and SPAO, and it might soon need to yield its top market position to a domestic player.
In the 2000s, Uniqlo enjoyed an indisputably high position in Korea, the company's third-largest market after Japan and China.
Uniqlo's sales in 2019 were nearly triple those of TOPTEN10, but the Korean rival has closed the gap, now making only 30 percent less revenue than the Japanese firm. While Uniqlo's sales have dropped, TOPTEN10's sales in the first quarter of this year have already doubled compared to last year.
“During the last two years, Uniqlo's sales figures have declined from 974.9 billion won to 574.6 billion won. TOPTEN10's sales have soared from 334 billion won to 430 billion won in the same period. If this trend continues, TOPTEN10's sales will likely surpass Uniqlo's this year,” an industry source said.
The movement to boycott Japanese firms in 2019 played a big role in bringing down Uniqlo's market share in Korea.
Protesters urge people to boycott Uniqlo in front of its store in downtown Seoul, in this 2019 file photo, after the Japanese retailer released an ad insulting wartime sex slaves. Korea Times photo by Bae Woo-han
TOPTEN10 has adopted a patriotic marketing strategy to gain customers' hearts here by promoting the advertising phrase, “We will not let you wear Japanese underwear.” This slogan targeted Uniqlo's megahit inner-wear series “airism,” and successfully enticed some of their customers away from the Japanese brand.
The outbreak of the COVID-19 pandemic also gave local brands the chance to counterattack. TOPTEN10 and SPAO cut the prices of much of their clothing by 30 percent amid weakened consumer confidence.
The prices of women's pants at TOPTEN10 are mostly under 20,000 won, while Uniqlo's are over 30,000 won.
“The pandemic has changed market sentiment such that people now buy either expensive luxury goods or the cheapest fast fashion clothing. This change has maximized local fast fashion brands' advantages,” the source said.
TOPTEN10 and SPAO also increased their number of stores while global fashion firms were closing down branches affected by the pandemic. TOPTEN10 opened 115 new stores last year and it plans to introduce 30 more this year. Compared to the 134 stores it operated in 2016, the figure tripled by the end of 2020.
A study by the Korea Federation of Textile Industries shows that the local fashion market declined by 2 percent last year, while TOPTEN10's sales increased by 30 percent. It beat out the world's largest apparel retailer, Inditex's Zara, to become the No. 2 player here.