University of Economics in HCM city

FACULTY OF INTERNATIONAL
BUSINESS – MARKETING

FINAL REPORT
THE SUCCESS OF UNIQLO IN VIETNAM MARKET

Subject: International Business

Lecturer: Ms. Nguyễn Kim Thảo

Student’s Name Student ID Participation

Bùi Thu An 31221021644 100%
Đặng Anh Cường 31201027327 100%
Phan Đoàn Kim Duyên 31221020178 100%
Nguyễn Trần Quỳnh Như 31221025458 100%
Trần Thanh Thảo 31221025458 100%

Ho Chi Minh city, December 8, 2023

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 ABSTRACT
Uniqlo conquered Vietnam through a hybrid strategy: global core, local execution. Despite
higher prices, comfort-focused Vietnamese consumers embraced "LifeWear" & collaborations,
a user-friendly site, and diverse payment options cemented their success. This report dissects
their approach, suggests alternatives, and offers lessons for firms seeking global growth. By
balancing global standards with local nuances, companies can navigate the complexities of
international expansion and achieve sustainable growth.

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 MAIN TEXT
1. Introduction
In today's interconnected world, understanding the complexities of international business is no
longer a luxury, but a necessity. However, venturing into unfamiliar territory comes with its
own set of challenges.
This report aims to dissect the factors attributing to Uniqlo's success in Vietnam by analyzing
its market entry strategies, localization efforts, consumer engagement tactics, and operational
adaptation. While facing economic factors like higher price points compared to its home
market, Uniqlo has tapped into the socio-cultural factors driving Vietnamese consumer
preferences for comfortable, breathable fabrics - for example in its "AIRism" campaign” -
echoing the brand’s "LifeWear" philosophy.
Additionally, understanding the underlying political landscape in Vietnam has been crucial to
its success. Furthermore, Uniqlo's embrace of technological factors like e-commerce platforms
and diverse payment options has also contributed to its widespread popularity.
By analyzing Uniqlo's strategic blend of global consistency and local sensitivity, this report
will examine how they navigated these challenges, cultivated brand loyalty, and achieved
success.
2. Case presentation
2-1. Introduce the focal company and the case for analysis
Uniqlo was established in 1984, which is an apparel brand of Fast Retailing. It was founded by
Tadashi Yanai in 1984 in Hiroshima. One of the core brand pillars of Uniqlo is sustainability.
Uniqlo’s first venture into international markets in 2001 with 21 stores in the UK and 3 stores
in the US were opened. The Uniqlo operation boasts 2,434 stores worldwide. During the fiscal
year ending 31 August 2023, Uniqlo International’s revenue was Y1.43trn.
Uniqlo Vietnam’s first retail store was opened in 2019 in Ho Chi Minh City. Vietnam at that
time was the brand's sixth market in Southeast Asia and was also seen as Uniqlo’s key market.
However, there is much pressure for a successful launch of Uniqlo in Vietnam for both the
client and agency teams, not only in terms of financial indexes but also a must-win battle for
brand share of voice, social buzz and public awareness, given the aggressive competition from
other clothing brands such as ZARA or H&M which already have a presence.
2-2. Explain why the case is IB related
As the third-biggest producer and seller of private-label clothes in the world, Uniqlo has
achieved an important presence in international markets. Following the successful launch of
stores in many Southeast Asian nations, the penetration of the company into the Vietnamese

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market, which was a country with economic prospects since 2019 has opened a feasible
investment opportunity for Uniqlo. In the process of operating in Vietnam, Uniqlo has seen
significant growth in sales and recognition of its brand. However, to accomplish those goals,
Uniqlo had to deal with challenges posed by the international business environment, in this
case are challenges relating to economic and socio-cultural factors. Target market size, cost
involved, currency and exchange rate, and inflation are all economic elements influencing the
international business environment. All of these economic issues have a direct impact on
international business profitability. Therefore, before embarking on foreign trade activities,
businesses should thoroughly investigate these aspects. Social factors such as education,
awareness and trends and the status of people in society affect the consumer behavior to
purchase various goods and services.
3. Case analysis
3-1. Identify the key issues/problems the company faced in the case
When Uniqlo entered the Vietnamese market, it had to face numerous issues and regional
problems. Among these, the biggest and the most important issue that they have to deal with
from the beginning till recent years belongs to the economic factor.
The key issue Uniqlo needs to consider carefully here is “The overall price of Uniqlo clothes
sold in Vietnam is more expensive than in Japan”. The higher price of Uniqlo clothes in
Vietnam compared to Japan is a result of a combination of factors, including import costs,
operating expenses, market pricing strategy, and currency exchange rates. Additionally,
according to the World Bank, in 2022, the GNI per capita in Japan is significantly more than
10 times bigger than in Vietnam, with 42,440 USD in Japan and 4,010 USD in Vietnam.
However, the general price of Uniqlo clothes sold in Vietnam is more expensive than in Japan,
like these real-life examples:

Product The LOWEST Price in The LOWEST Price in

Vietnam market (dong) Japan market (dong)

Women Jacket 799,000 650,000

Skirt 499,000 425,000

Men Jeans 999,000 640,000

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When it comes to the socio-cultural factors, another issue arises that they need to take it
seriously: “The strengths of Uniqlo's products do not align with the clothing preferences of
Vietnamese consumers”.
Japan is not known for being especially cold, but Uniqlo has become known for its thermal
credibility. Uniqlo’s cold-weather clothing has now taken on a cult-like status. While much of
the high street wanes, Uniqlo’s sales are up 8.4% yearly, with the majority of its revenue
coming from its cold-weather clothing. One specific cold product line that has brought Uniqlo's
name to the world is Heattech. The technology is made from ultra-fine fibers that trap heat and
wick away moisture from the body to keep you dry and comfortable.
In contrast, Vietnamese people tend to purchase clothes that are Comfortable and Breathable
Fabrics. Vietnamese consumers often face hot and humid weather conditions, so they prefer
clothes to be thin, light clothes that absorb sweat well, which preference type of clothes and
materials different from Uniqlo’s strengths.
The economic and socio-cultural factors analyzed above are two core and key issues that
Uniqlo always needs to deal with to win the trust and purchasing preferences of Vietnamese
consumers.
3-2. Describe the approaches undertaken by the company to address the
issues/problems
Uniqlo has successfully based on the transnational strategy to balance both global integration
and local responsiveness.
- Marketing campaigns:
Some notable campaigns: “LifeWear” Campaign, UTme! Campaign:, AIRism Campaign,... or
a customer appreciation event called "Thank You Week" with many gifts and discount codes
for all products at all Vietnamese Uniqlo chain stores.
Uniqlo collaborates with major e-commerce platforms like Lazada, Tiki, expanding its online
reach and offering additional purchasing options. Also, Uniqlo sends email newsletters to
subscribers with promotions, product launches, exclusive offers,...
- Adapted product offerings as well as collaborations with local designers:
As the weather in Vietnam differs from that in Japan, some featured products need to be
replaced. Uniqlo produces a series of casual products in all sizes and colors to meet the needs
of all Vietnamese customers.
Uniqlo has collaborated with local Vietnamese designers to create unique product lines, e.g,
MICKEY GO VIETNAM.

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On 4/11/2020, Uniqlo opened a new independent online store, which changed many unique
layouts of its websites and applications in comparison with Japanese online stores.
+ Simpler and more user-friendly website with clear navigation and larger product
images.
+ A wider range of payment options, including popular local e-wallets like Momo and
ZaloPay,...
+ More attractive with brighter colors application layout with the color red as red is
important in Vietnamese culture, compared to the color brown in Uniqlo JP app.
- Making use of its own strengths and availability:
Uniqlo offers a comprehensive and convenient customer service experience in Vietnam.
+ Online store: chatbot, live chat, hotline, email, social media, and an FAQ section.
+ Offline store: a strong knowledgeable local team to helpfully and politely provide
product information, answer customer questions, assist with purchases,...
Uniqlo, instead of “fast fashion”, focuses on “dress casual”. Uniqlo avoids heavily trend-driven
designs and concentrates on classic silhouettes adaptable to various occasions and personal
styles. Also, Uniqlo prioritizes their standards, using organic cotton, linen, and AIRism
technology.
3-3. Evaluate the company’s approaches
- Marketing Campaigns:
Uniqlo's marketing campaigns in Vietnam have been highly successful to change the customers
perception to use eco-friendly and casual clothes. Uniqlo's customer satisfaction ratings in
Vietnam are consistently high, meaning that Uniqlo consumers are satisfied with the value of
Uniqlo products.
Uniqlo can solve the economic issue as it can build brand awareness, drive sales, and establish
itself as a leading clothing brand in the country.
Limitation: with numerous marketing campaigns, Uniqlo may lose its consistent messaging as
it can confuse consumers about the true value of Uniqlo’s products.
- Adapted product offerings as well as collaborations with local designers:
Uniqlo can customize their own products, which creates their values and competitive
advantages. This significantly helps Uniqlo manage the local responsiveness.
Uniqlo can also solve the socio-cultural issue as Uniqlo can ensure that its product offerings
are well-suited for the Vietnamese market and compete effectively with other Vietnamese
clothing retailers, to build a loyal customer base appreciating the value and quality of their
products.

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 - Making use of its own strengths and availability:
Uniqlo makes use of its standard, using their available technology, helps to adapt to global
integration.
Uniqlo can solve the socio-cultural issue because, compared to the other fast-fashion brands,
Uniqlo still promotes the spirit of dressing “well” instead of dressing “beautifully”. The clothes
still ensure the applicability at affordable prices as well as the quality of the clothes. Therefore,
Uniqlo products are always among the top favored brands in the Vietnamese market.
3-4. Suggest alternative or better solution (if applicable), and explain why
To capitalize on untapped potential for further growth, Uniqlo should consider implementing
the following three strategic enhancements:
- Expand into smaller cities
Venturing into smaller cities presents a strategic opportunity to tap into an untapped market
and cater to a wider segment of the Vietnamese population.
Smaller cities experiencing rapid urbanization and economic development over the years. This
has led to a growing middle class with rising disposable incomes and increasing demand for
quality apparel. Uniqlo's LifeWear philosophy, emphasizing simple, functional, and affordable
clothing, aligns well with the preferences of consumers in these smaller cities, who are seeking
value-driven fashion that complements their evolving lifestyles.
- Partner with local communities:
Partnering with local communities could involve various initiatives, such as:
+ Supporting local education and healthcare programs.
+ Promoting environmental sustainability.
+ Empowering local artisans and entrepreneurs.
Through engaging in these partnerships, Uniqlo would not only enhance its brand reputation
as a socially responsible and environmentally conscious organization but also build trust and
loyalty among Vietnamese consumers.
- Improve membership program
Current Uniqlo Membership Policy in Vietnam
Uniqlo offers a free membership program in Vietnam that provides members with various
benefits, including:
- 100.000VND discount on orders in the birthday month
- 100.000VND discount on first order
- Free shipping on online orders
- Exclusive discounts and promotions only on Uniqlo’s app

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Suggestions for Improvement
- Personalized rewards: Uniqlo could use customer data to personalize rewards and offers
based on individual preferences and purchase history
- Tiered membership: Uniqlo could introduce a tiered membership program with
different levels of benefits.
- Gamification: Uniqlo could incorporate gamification elements into its membership
program to make it more fun and engaging.
- Localized communication: Uniqlo should ensure that all membership communications
are translated into Vietnamese and are culturally relevant.
4. Implications for firms/managers in a similar situation
Uniqlo's success in Vietnam is a compelling example of how to effectively navigate rising
challenges and achieve sustainable success in a new market.
- Conduct Thorough Market Research and Understand Local Preferences
Before entering any new market, it is crucial to conduct thorough market research to gain a
deep understanding of local consumer preferences, fashion trends, and regulatory requirements.
This will enable firms to tailor their product offerings, marketing strategies, and operational
processes to align with local needs and expectations.
Uniqlo's success in Vietnam can be attributed, in part, to its meticulous market research efforts.
The company carefully studied Vietnamese consumer preferences, identifying a strong demand
for quality, affordable, and practical clothing. This insight led Uniqlo to adapt its product
offerings to suit the Vietnamese market, introducing smaller sizes, developing climate-
appropriate fabrics, and partnering with local suppliers.
- Adapt Product Offerings and Marketing Strategies to Local Needs
Firms expanding into new markets must be willing to adapt their product offerings and
marketing strategies to cater to local preferences and cultural nuances. This may involve
modifying product designs, introducing new features, or adjusting pricing strategies to align
with local market conditions.
Uniqlo exemplifies this approach in Vietnam. The company introduced smaller sizes to
accommodate the average Vietnamese body type, developed lightweight, breathable fabrics for
the hot and humid climate, and partnered with local designers to incorporate traditional
Vietnamese elements into their product designs. Additionally, Uniqlo adjusted its pricing
strategy to ensure affordability for Vietnamese consumers.
- Maintain Global Brand Identity and Quality Standards

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While adapting to local conditions is essential for success in new markets, firms must also
maintain their global brand identity and quality standards. This ensures consistency in brand
messaging, customer experience, and product quality, reinforcing brand recognition and trust
among consumers worldwide.
Uniqlo has successfully balanced adaptation with standardization in Vietnam. Despite tailoring
its product offerings to local preferences, the company has maintained its global standards for
quality and design. This consistency has helped Uniqlo establish a strong reputation in Vietnam
and gain the trust of local consumers.
- Balance cost reduction with local responsiveness
Achieving a balance between cost reduction and local responsiveness is crucial for firms
operating in new markets.
Uniqlo leverages its global scale to achieve economies of scale and reduce production costs.
However, they also recognize the importance of local responsiveness. Hence, Uniqlo partners
with Vietnamese manufacturers and suppliers to produce some of its goods in Vietnam.
Additionally, Uniqlo collaborates with local designers to create unique product lines that
incorporate Vietnamese cultural elements and resonate with local consumers.
This balance between global efficiency and local responsiveness has helped the company
achieve significant cost savings while maintaining the ability to adapt its products and services
to meet the needs of the Vietnamese market.
5. Conclusion:
One of the fast fashion companies that is said to be the most well-known and prosperous in the
Vietnamese market is Uniqlo. Uniqlo has been able to overcome cultural and economic
challenges in order to bring products closer to Vietnamese consumers by continuing to
maintain, develop, and adjust business methods to suit the needs of Vietnamese customers.
The COVID pandemic has made people more frugal with their money, which has resulted in a
significant decline in the desire for fashion. But rather than emphasizing "dressing beautifully,"
Uniqlo has made customers feel like they are "wearing durable," which makes perfect sense
for the Vietnamese market. Based on Uniqlo's intended business approach of offering premium
products at competitive prices and providing professional customer service, the company is
expected to expand and achieve more success in Vietnam.

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