The fast fashion magnate shares his thoughts on realistic sales targets and the possibility of opening a second flagship store in Southeast Asia
Tadashi Yanai is no stranger to failures—the founder and CEO of Uniqlo is frank about rectifying the mistakes he's made at the helm of his global apparel retail chain, while learning valuable lessons along the way. But this hasn't stopped Yanai from setting the bar (and his personal goals) high, including holding steadfastly to his vision of making Uniqlo's parent company Fast Retailing Co. the top clothing retailer in the world by 2020. In a recent interview with Yanai in celebration of Singapore's first flagship opening, he talks candidly about the importance of having functional clothing in the everyday life, the possibility of tripling sales profits, and even a potential second Southeast Asian flagship store in the making.
On the challenge of constantly creating innovative fabrics:
Tadashi Yanai: "Apparel businesses in Singapore, USA, Japan aren't meant to be easy anymore. We aspire to truly offer great clothing at affordable price points. That's what all other brands say, but we truly mean to do that. Japan used to be the biggest exporter of textiles in the world, whether it's natural fabrics or synthetics. We have a partnership with one of our suppliers for our fabrics—and they have evolved to become a supplier of electronics and carbon. Intellectual property and constant research are what's driving our technology, and that's what we try to apply to our fabrication of the clothing. We source the best material from around the world, such as cotton from the USA, cashmere from China and Mongolia, and French linen too. But we want to make it affordable for everyday wear. I believe Japan is best positioned to do so, because in the history of Asia, Japan has inherited the tradition of clothing."
On Uniqlo LifeWear:
Tadashi Yanai: "We are launching LifeWear which is a newly-conceived line that currently represents our philosophy and how to wear clothing. LifeWear means our clothing goes through constant changes. Back then, clothing was worn for survival, but now it's worn for social purposes. People wear clothes for sports, different occupations, traditions and more. Now, we wear clothing to better express ourselves, whether in different materials or from various designers. Everyday wear is most important in our closet. Functionality is essential, as what you wear must fit your lifestyle. We want to inject that philosophy into our clothing. That's what we're keen in offering to the people across the globe."
On realistic sales target:
Tadashi Yanai: "We don't have a numerical sales target when it comes to our Southeast Asian countries, but 30% of our profits are from these countries. We refrain from making certain statements with specific percentages when it comes to sales target. But in five years will we see a triple in profits? We sure hope so [laughs]. We still advocate the 5 trillion JPY mark. I can't tell you whether we'll hit this five years or ten years. Five years ago, things were vastly different than it is now. We are not ready to disclose our plans because there are so many uncertainties at this point."
On expansion opportunities in Southeast Asia:
Tadashi Yanai: "USA has a lot more opportunities than Europe, and we have invested more resources than we'd expected. Mistakes will always be made, such as insufficient management capabilities in the East Coast of the USA. We are willing to look into expanding in Vietnam, Cambodia, Laos, and Myanmar. We'll probably expand in India first before these said countries—we're interested in starting production in India prior to starting a retail front. Eventually the retail side of it will happen, and we are striving to make preparations for that. Production has already started."
"We are very keen on strengthening our e-commerce aspect...I think this will become a big thing in Southeast Asia. SEA is a huge part of the world and there is great potential here, and it's all about having the right network in each country, whether in Indonesia or Thailand. Opening stores is possible, but training people for these stores is the challenging part. These people will be managing these stores for us, and the training doesn't happen overnight. So far, the management is Japanese-centric, but we need to keep empowering local talented individuals and assemble local leadership teams."
Tadashi Yanai: There will be specific products that will be produced in Singapore, Malaysia and Indonesia. But it's impossible to distinguish people based on what they wear—it depends on the person's taste, occupation, style etc. Their preferences don't depend on where they live. Body sizes and colour palettes might vary across each region. For example, people in Poland, USA and Germany are generally bigger-sized than their Southeast Asian counterparts, so we need to cater to their needs. We keep educating ourselves and try to do a better job."
On a potential second flagship store in Southeast Asia:
Tadashi Yanai: "We could launch a possible flagship in Kuala Lumpur or even Penang, but it has to be a store that locals are proud of. We plan to convert local existing stores to celebrate each local culture's uniqueness. I think having local-rooted elements is an important aspect. This is why we decided to engage local artists in Singapore for the opening of the flagship store. I think the opening of Singapore's flagship store will create better synergy and positive effects in the country. The population here isn't necessarily the biggest, so I'm also thinking that some of the customers are mostly tourists and foreigners too. They will be enticed to shop here as this is the only flagship in Southeast Asia. In fact I think it can create more business in other stores in this part of the world."
On social media's impact on the industry in this age:
Tadashi Yanai: "Social media is a very big platform and can impact our revenue. This is actually how you can reach out to people across the world instantaneously, especially with smartphones. The impact of social media is enormous—whoever controls social media controls the advertising industry of the world."