50 million annual salary to recruit talents! Why is UNIQLO so generous?

Reporter | Zhou Fangying

Edit | Lou Shuqin

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According to the Nikkei Chinese Network, Uniqlo's parent company, Fast Retailing Group, intends to raise the maximum annual salary for social recruitment to 1 billion yen (about 55.4 million yuan), far exceeding the average annual salary of Japanese corporate social recruitment by more than 200 times. In his 2021 financial report, the annual salary of Swift Retailing President Yanai Masaharu himself was only 400 million yen (about 22.16 million yuan).

According to the 2021 financial report, Fast Retailing has more than 50,000 employees worldwide. Among them, the headquarters has about 1,600 employees, with an average annual salary of 9.63 million yen (about 530,000 yuan).

Yanai is in an interview with the Nihon Keizai Shimbun and said: "What we need is not consultants and people from large companies, but people who can create new value or can start from scratch." At the same time, there is no upper limit on the number of recruitments. Yanai masa said: "I will target a genius who is better than me. If there are good talents, be prepared to recruit 100 to 200 people."

Yanai further indicated that it will recruit talents who work at Fast Retailing headquarters and are proficient in digital and e-commerce transactions and supply chains, change the revenue structure centered on clothing production and sales, and establish a new business model. He also emphasized that Fast Retailing's future competitors will change from similar fast fashion brands to Internet companies represented by Google, Apple, Meta (formerly Facebook) and Amazon.

In fact, as early as 2016, Fast Retailing Group put forward its medium-term vision of becoming a "digital apparel retailer", and continued to carry out supply chain reform in all aspects from raw material procurement to planning, design, production and retail.

In 2017, Fast Retailing officially opened its Ariake headquarters in Tokyo, which includes the headquarters of its brands, as well as multiple floors of automated warehouses dedicated to e-commerce. Since then, Fast Retailing has begun to promote the "Ariake Project", including developing products based on customer feedback, forecasting demand, and refining inventory management, thereby shortening the production cycle. In addition, there are channel reforms such as the introduction of automated warehouses and online and offline integration.

According to recent news from the Nikkei Chinese Network, Fast Retailing Group is building a state-of-the-art warehouse in major markets around the world that can automate the sorting and entry and exit of goods. The automated warehouse is expected to open in China in fiscal year 2022 with a total investment of 100 billion yen (about 5.5 billion yen).

Judging from the news of this high-paying recruitment, UNIQLO will further increase its investment in the direction of digital transformation, especially at the strategic level.

Image source: Fast Retailing Group

The above-mentioned "flexible fast reaction" developed based on retail demand to reduce inventory is also a hotly discussed direction in the entire apparel manufacturing industry. The more segmented and diversified needs of the consumer side are forcing the entire industry to transform in the direction of digitalization and intelligence.

The most obvious example is that the integrated supply chain and the new speed that the fast fashion giants represented by ZARA and H&M are proud of are being challenged by Chinese cross-border e-commerce companies with flexible supply chains as the core like SHEIN.

Interface Fashion has reported that the production cycle of SHEIN's core fast fashion category is currently 5 to 7 days at this stage - this refers to the entire cycle from the supplier's response to the completion of the product delivery. In the event of a blockbuster additional order, the supplier can deliver in 3 to 5 days at the earliest.

SheIN, which can achieve ultra-fast speed, relies on not only the complete industrial chain cluster in Panyu, Guangzhou, but also the self-built supply chain information management system. This system covers 10 sets of subsystems for 9 different departments such as commodity centers, operation centers, and production departments, which can accurately and timely reflect the information and data of each link and reduce communication costs.

Although the cross-border e-commerce SHEIN is still focusing on overseas markets, more online brands relying on supply chain development have begun to emerge in the Chinese market. These new brands are more familiar with the rules of online e-commerce, and can also drive down low prices by relying on mature supply chains, and will undoubtedly become challengers for international fast fashion brands.

At the same time, the international travel shutdown brought about by the epidemic has also catalyzed the development of the online e-commerce economy. This also poses a challenge to apparel companies like Uniqlo that have taken advantage of offline retail networks. Fast Retailing's financial reports in recent years have also shown that the expansion of e-commerce business will become the focus, especially to integrate e-commerce business with offline stores.