QUESTION2:

2.1 Reasons for choosing Uniqlo

Uniqlo is a symbol of minimalist and casual design, manufacturing as well as it is Japan's

global fast fashion retail group. Since November 2005, Uniqlo is a subsidiary of Fast
Retailing Co., Ltd (Ogori Shoji). Founded in May 1984, its president is Tadashi Yanai
and its senior vice president is Takahiro Wakabayashi. With the remarkable growth to
more than 500 domestic stores present in Japan, in 2001, Uniqlo decided to move into the
international market, starting with a store in London, then approaching the country of
billions of people in Shanghai, China,... Currently, Uniqlo has developed and operates in
16 global markets including Japan, Hong Kong, Taiwan, South Korea, Singapore, China,
Malaysia, Thailand, Philippines, Indonesia, Australia, USA, UK, France, Germany and
Russia.

At the present time, Uniqlo has a number of stores in Ho Chi Minh, Hanoi, Binh Duong
and Da Nang. With the combination of modern simple designs, high-end product quality
and focus on creating long-term, affordable sustainable products in line with consumers'
daily needs, Uniqlo has become a an iconic fashion brand for the Vietnamese people.
This brand not only attracts a diverse number of customers, but the fashion of its products
is always guaranteed by quality as well as focusing on the comfort and convenience of
customers. Because of that, Uniqlo will bring to locals as well as tourists in Long Thanh,
Dong Nai a comfortable and special shopping space.

https://www.scmp.com/lifestyle/fashion-beauty/article/3029602/uniqlo-story-single-
store-global-fashion-empire-ambitions

In Long Thanh district, the population here is growing rapidly with the preparations here
(Long Thanh International Airport, Long Thanh Industrial Park, Ho Chi Minh City 3rd
Ring Road,..) will attract a large number of tourists as well as migrants. This is the ideal
place to open more branches in the center of Long Thanh town. The population in Long
Thanh district, Dong Nai is 356,051 people (2023) with a population density of 826
people/km², this is a place with great consumption potential. With the economy tending
to grow, especially industries, logistics, public investment and infrastructure
development, attracting a large number of migrants, foreign customers, as well as
tourists, highlights the shopping potential and creates a strong fashion consumption
market. Product quality along with reasonable prices, this combination will help Uniqlo
succeed in exploiting the market here. In addition, Dong Nai province (2023) province
has welcomed 3,840,000 tourists, an increase of 12.8% compared to 2022. In which,
domestic tourists reached 3,520,000, international tourists reached 320,000, this is a
prerequisite to help Uniqlo receive the number of domestic customers and foreign visitors
from neighboring areas to improve revenue. The opening of Uniqlo's branch in Long
Thanh district will greatly promote opportunities to enhance brand and reputation with
local as well as global brands.

https://dongnai.gov.vn/

https://www.gso.gov.vn/

https://vnanet.vn/vi/anh/anh-thoi-su-trong-nuoc-1014/dong-nai-don-gan-28-trieu-luot-
khach-du-lich-nam-2023-7159584.html

2.2 Target Market & Trade area

2.2.1 Target Market

With a global reach, Uniqlo is a Japanese fashion brand and a household name in the
international market with a simple but powerful mission: focusing on high-quality
fashion clothing products (advanced fabric technologies such as Heattech and AIRism,
helps keep warm and breathable), flexible, lifewear. Although this brand is coming to
basic designs, sustainable fashion, they are constantly receiving new trends, innovation
but still have the core special point of the brand. Along with the growing economy and
the increasingly widespread fashion wave in Vietnam, Uniqlo has quickly become one of
the popular fashion brands, having stores in big cities such as Ho Chi Minh, Hanoi, Da
Nang, Binh Duong. Uniqlo reaches young people and adults in urban areas with busy
lives, Give priority to products with high quality products and simple yet fashionable
design. At the same time, Uniqlo's strong message about LifeWear lifestyle – the
combination of quality, utility and style in everyday wear – to Vietnamese consumers
was quickly strongly accessible, enhancing their brand awareness. The fact that Uniqlo
always maintains prices and smart marketing strategies and promotions, has created a
comfortable and attractive shopping environment, meeting the shopping needs of
consumers in Vietnam. In addition, Uniqlo also has a strong presence in Vietnam's online
shopping community creating a strong connection with consumers through retail stores
and online shopping channels.

2.2.2 Trade area

Geographically, Uniqlo's trade area in Long Thanh town, Dong Nai province offers a
great opportunity to develop business as well as expand markets. Long Thanh town is
45km southwest of Ho Chi Minh City, 15km southwest of Bien Hoa City, 15km east of
Long Khanh city, 70km southeast of Vung Tau city. Dong Nai province is one of the
most developed industrial provinces in Vietnam with large industrial parks, a large and
diverse population creating a dynamic economy with a large consumption market, traffic
location and developed infrastructure to facilitate mobility and business. So this is the
ideal place to bring Uniqlo stores here. In terms of economy, Dong Nai province ranks
10th in terms of national GDP (2023), GRDP in the first quarter of 2023: VND 58,845
billion, up 7.1% over the same period in 2022, focusing on the fields of Industry -
Construction, Services and Agriculture. In terms of tourism, Dong Nai province has
GRDP in 2023: VND 262,630 billion, up 5.3% compared to 2022. Total number of
tourists (2023): 4.8 million (reaching 87% of the year plan). In which, domestic tourists:
4.45 million, international tourists: 350,000. Therefore, it contributes to meeting the
shopping needs and daily activities of local residents and tourists in Dong Nai province.
The market strategy of opening Uniqlo stores in a shopping center in the center of Long
Thanh town, Dong Nai province, strongly exploiting the resources of the strong
commercial sector and the contribution of economic and geographical factors helps to
better guide the strategy of this location for Uniqlo.

https://skhdt.dongnai.gov.vn/Pages/chuyenmuc.aspx?gid=

https://baodongnai.com.vn/kinhte/202212/khoang-22-trieu-khach-du-lich-den-dong-nai-
trong-nam-2022-3149000/

2.3 Potential Market

Table 2-1 Population estimates for several districts and cities within Dong Nai
province.
Name of District/Cities Population (people)
Long Thanh District 534,370
Bien Hoa City 1,055,414
Long Khanh City 245,280
Nhon Trach District 352,452

https://skhdt.dongnai.gov.vn/Pages/chuyenmuc.aspx?gid=

https://dongnai.gov.vn/

https://baodongnai.com.vn/

https://www.gso.gov.vn/

https://viracresearch.com/thi-truong-thoi-trang-viet-nam-va-xu-huong-thoi-trang-2021/

In terms of total income per capita in Dong Nai province in 2023, it will reach 139.75
million VND/person/year. The proportion of spending on clothes and accessories of
people in Dong Nai province accounted for 5.6%, about 7,826 million VND.

 Long Thanh is located in Dong Nai province, and also where there is a fast
growing rate, there are large cities nearby and densely populated. So the number of
 people in Long Thanh neighborhoods who can be willing to spend on clothes and
accessories in Long Thanh is 40%, which also means that 4,132,865 people will be
willing to come here to buy clothes and accessories. The total number of people
willing to buy clothes in Long Thanh is:
534,370 + 4,132,865 = 4,667,235 people.
 Based on the shopping demand of the people of Long Thanh and surrounding
areas about buying clothes and accessories in Long Thanh, we can estimate that
the percentage of people who will come to Uniqlo to shop is 6%. Based on this
ratio, we can calculate the average number of times people buy clothes and
accessories at Uniqlo in 2024 as:
7,826 * 0.06 = 469.56 million VND
From the above data, we can see that the amount of spending on clothes and
accessories in Long Thanh district in 2024 is VND 469.56 million. From there, we
can deduce that Uniqlo's potential market growth in 2024 can be calculated as
follows:
469,56 * 4,667,235 ≈ 219,154,686,660 VND

2.4 Market Share

Based on the size of Uniqlo stores present in Vietnam, and the area in Long Thanh town.
In Long Thanh town, we can estimate the proposed area to be 1000 square meters.
Referring to the above figures, we can estimate Uniqlo's market share as follows:

1000
=3.84 %
25000+1000

The data calculated above shows that the market share of Long Thanh town is about
3.84%.

In Long Thanh town, we can identify the highlights and opportunities for Uniqlo, the
young population and strategic location, Long Thanh town is located near Long Thanh
International Airport, which is extremely convenient for attracting tourist customers, as
well as convenient transportation, easy connection to neighboring areas in Dong Nai
province and Ho Chi Minh City. This place also attracts many investors, the development
of the economy will lead to the demand for high-end costumes, especially currently Long
Thanh town does not have many international fashion brands, the appearance of Uniqlo
can hit the clothes shopping here.

In terms of Uniqlo's competition in Long Thanh town. Based on the price, they can be
considered quite high here, competitors must be wary of retail stores distributing clothes
and accessories here in casual, low-cost clothing, and local brands will have an advantage
in terms of price as well as the demand of local customers. And importantly, the cost of
 premises, qualified personnel, the transportation of goods in Long Thanh town can be
higher than in other areas.

2.5 Projected Income

Projected income is calculated based on potential market and market share:

219,154,686,660 * 3.84% ≈ 8,415,539,967.74 VND

Since this is a retail business, Cost of goods sold (COGS) and Selling General &
Administrative Expense (SG&A) will account for high percentages. Land rental in Long
Thanh town with 1000 square meters: 50,000,000VND/month. A total of 40 employees
were hired to work at the Uniqlo store in Long Thanh town. Including 25 full-time
employees and 15 part-time employees, each working 4 days/week and 4 hours/day. In
terms of employee benefits, we will have a 13th month's salary after each end of the year,
20 eligible people will be selected, and additional bonuses (in terms of benefits and
related insurance). Interest expense is also shown in the following detail:

(Unit: VND)

Table 2-2 Interest Expense

Disorder 5,000,000,000 4,500,000,000 4,050,000,000 3,645,000,000 3,280,500,000
armotization
Interest rate 7% 7% 7% 7% 7%
(%)
Interest 350,000,000 315,000,000 283,500,000 255,150,000 229,635,000
expense

Table 2-3 Provide a forecast of the value statement over a five-year period.
2025 2026 2027 2028 2029
Sales 8,415,539,968 9,677,870,963 11,129,551,607 12,798,984,348 14,718,832,001
COGS 3,366,215,987 3,871,148,385 4,451,820,643 5,119,593,739 5,887,532,800
Gross margin 5,049,323,981 5,806,722,578 6,677,730,964 7,679,390,609 8,831,299,200
Expense
Rent 600,000,000 600,000,000 600,000,000 600,000,000 600,000,000
Wages 178,520,000 196,372,000 216,009,200 237,610,120 261,371,132
Benefits 130,000,000 143,000,000 157,300,000 173,030,000 190,333,000
Advertising (7%) 589,087,798 677,450,967 779,068,613 895,928,904 1,030,318,240
SG&A 841,553,997 967,787,096 1,112,955,161 1,279,898,435 1,471,883,200
Utility 600,000,000 660,000,000 726,000,000 798,600,000 878,460,000
Insurance 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000
Depreciation 84,155,400 96,778,710 111,295,516 127,989,843 147,188,320
Repair and 673,243,197 774,229,677 890,364,129 1,023,918,748 1,177,506,560
maintenance
Interest expense 350,000,000 315,000,000 283,500,000 255,150,000 229,635,000
Other expense 420,776,998 483,893,548 556,477,580 639,949,217 735,941,600
Total expense 4,567,337,390 5,014,511,998 5,532,970,198 6,132,075,268 6,822,637,052
EBT 481,986,591 792,210,579 1,144,760,766 1,547,315,341 2,008,662,148
Income taxes 96,397,318 158,442,116 228,952,153 309,463,068 401,732,430
Net income 385,589,273 633,768,463 915,808,613 1,237,852,273 1,606,929,719

Source by author