Uniqlo Tops Zara to Become World's Largest Apparel Market Cap Leader

Stock Price Reaches 102,500 Yen on the 16th, Surpassing 100,000 Yen for the First Time

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Fast Retailing, the operator of Japan's representative fashion brand 'Uniqlo,' has surpassed the Spanish company Inditex, which owns the 'Zara' brand, to become number one in the global apparel industry's market capitalization ranking.

According to the Nihon Keizai Shimbun on the 17th, Fast Retailing, listed on the Tokyo Stock Exchange, closed trading at 102,500 yen, up 3.06% from the previous day, marking the first time it reached the 100,000 yen level.

Accordingly, Fast Retailing's market capitalization increased to 10.8725 trillion yen (approximately 114 trillion won), surpassing Inditex, listed on the European stock exchange, for the first time (closing price on the 15th: 81.7 billion euros, approximately 10.46 trillion yen).

The Nihon Keizai Shimbun analyzed that "this appears to reflect growth in Asian regions such as China, where COVID-19 is being controlled, along with expectations for improved profitability due to accelerated digital adaptation."

In fact, as of November last year, Uniqlo had a total of 2,298 stores, with 60% located in Asian regions excluding Japan. In particular, the number of stores in China, which achieved rapid economic recovery despite the COVID-19 pandemic, stands at 791, nearly matching Japan's 815 stores, the highest number. Accordingly, as of the fiscal year ending in August last year, the operating profit margin in the Greater China region (including Hong Kong and Taiwan) was 14.4%, surpassing the Japanese market's 13%.

On the other hand, Zara has 70% of its stores in Europe and the Americas, regions where large-scale city lockdowns have led to repeated store closures, causing difficulties in overall profitability.

The Nihon Keizai Shimbun also noted that digitalization, accumulated even before the spread of COVID-19, is cited as a reason investors chose Fast Retailing. Since 2016, Uniqlo has promoted itself as an 'information manufacturing retailer,' attaching IC tags to all products and analyzing popular product data from both offline stores and online shopping malls to utilize in marketing strategies. Additionally, it has established a production system using artificial intelligence (AI) in collaboration with companies such as Google in the United States.

However, there are also criticisms that Fast Retailing still has a long way to go in terms of sales. Based on fiscal year sales, Inditex ranks first with 28.2 billion euros (approximately 3.5 trillion yen), Sweden's H&M is second with 187 billion krona (approximately 2.3 trillion yen), and Fast Retailing remains third with about 2 trillion yen globally.

This content was produced with the assistance of AI translation services.