Uniqlo’s success mirrors the growth of Japan’s industrial giants

DRIVE through any city in South-east Asia and Japan’s commercial presence is visible everywhere: vehicles made by Toyota, Honda and Nissan clog the roads, the result of decades of market dominance in the region. If Fast Retailing, the parent company behind clothing retailer Uniqlo, has its way, the drivers of those vehicles will soon be wearing Japanese clothes, too.

The company’s latest results were a boon for shareholders, with operating profits of 103 billion yen (S$1 billion) in the three months to the end of February, up by 48 per cent compared with the same period last year. They already had good reason for cheer: the company’s shares have risen by 53 per cent in the past 12 months, making it one of the best-performing large listed companies in Japan. Its shares are now just 10 per cent shy of their all-time highs in February 2021, and with a market capitalisation of US$76 billion, it is the country’s sixth-largest listed firm.

At first glance, Uniqlo is an unusual story of a Japanese retailer succeeding overseas. Fast Retailing’s main international competitors – Hennes & Mauritz, the parent company of H&M, and Inditex, the parent of Zara – are based in Sweden and Spain respectively. But the firm’s growth abroad follows as much in the footsteps of Japan’s industrial and manufacturing firms as its European peers.