Japanese clothing giant Uniqlo is now speeding up its grip on Australia's retail clothing market as local companies struggle to establish a foothold as Uniqlo's sales grow to double-digit figures.
Sales of Uniqlo's 16 Australian stores rose 14.5 percent, or 31 million yuan, to 243 million yuan in the year to the end of August 2018, according to corporate regulators at the end of December.
Some people call Uniqlo a "department store killer." Documents show Uniqlo's pre-tax profit reached 9.7 million yuan, up sharply from 7.5 million yuan a year earlier.
Uniqlo has been very popular in Japan, and a variety of affordable basic fashion clothing under the brand has been a success in the world.
Uniqlo, which opened its first store in Melbourne in April 2014, expanded rapidly and now has 16 stores.
Uniqlo opened two stores in 2018 and two in 2019, one in Sydney's Westfield Hornsby, and the other in Melbourne's Docklands.
Australian clothing sales grew by just 4.8 percent a year, according to the latest figures from the Australian Bureau of Statistics, which means Uniqlo's growth rate is at the expense of other retailers' lacklustre operations.
Pippa Kulmar of Retail Oasis, a consultancy, says Uniqlo is also doing better than other fast-fashion clothing brands, including Ham M and Zara, because it insists on a high-quality base model. After all, pop money changes every quarter.
Kulmar said: "they were slow in the Australian market because when Uniqlo first came to Australia, a lot of people didn't know what it was, unless they had seen Uniqlo in Asia before. Uniqlo is going to be a great success in the fashion shift towards seasonal clothing, and people are more likely to buy a pair of jeans that can be worn for a year or two rather than a season just because they are left behind from time to time. "
Uniqlo stole sales from outdoor clothing retailers, mid-market fashion retailers and department stores, Kulmar said. The price of clothing in many department stores cannot compete with Uniqlo clothing.
"Uniqlo would not have been able to achieve such a rate of growth without taking a share from a lot of different retailers."
Uniqlo is just one of the international fast-fashion retailers grabbing local market share, and they, along with Zara,H&M and Topshop, have created a lot of trouble for local companies.
In the previous fiscal year, Myer sales were down 3 percent to 3.1 billion yuan,; David Jones down 0.1 percent, just Jeans down 1.7 percent, country Road Group down 1.8 percent.
Documents show that Uniqlo's Australian company paid a revenue tax of $3.2 million last year.