The renowned Japanese clothing brand, Uniqlo, operated by Fast Retailing Co., has announced its commitment to boost wages for both full-time and part-time employees working in its Chinese stores by as much as 44%. This move is aimed at boosting morale, attracting new talent, and fostering business expansion in what is Uniqlo’s largest international market.
Uniqlo’s wage increment initiative has already been set into motion this month, commencing with its outlets in key cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, with plans to extend the wage hike to other regions in China in the near future.
As a result of this substantial wage increase, Uniqlo employees in China are anticipated to experience an average annual pay raise of 28%. This significant enhancement of wages is poised to make a significant impact in a market that holds great importance for the global brand.
At the close of August, UNIQLO boasted a total of 925 stores on the mainland of China. The company reported a combined income, encompassing mainland China, Taiwan, and Hong Kong, amounting to 620.2 billion yen (approximately $4.1 billion) for the fiscal year concluding in August. This marked a 15% year-on-year increase, with mainland China, Taiwan, and Hong Kong contributing to more than 20% of Uniqlo’s global sales. It is worth noting that these regions constitute nearly half of Uniqlo’s sales outside Japan.
Fast Retailing Co. has ambitious plans for further expansion in mainland China, Taiwan, and Hong Kong, intending to open an additional 80 stores by August 2024. Concurrently, the company is focused on bolstering profitability by either closing or renovating roughly 50 stores that have experienced a decline in customer footfall.
Uniqlo’s decision to raise employee wages comes in response to China’s pressing job shortage issue, with the unemployment rate among young individuals reaching an all-time high. Simultaneously, grievances regarding working conditions have been voiced on social media platforms, with some part-time Uniqlo employees expressing dissatisfaction with meager wages and obligatory cleaning duties.
This bold step taken by Uniqlo is anticipated to not only address labor concerns but also promote the company’s growth and strengthen its position in the competitive Chinese market. As the implementation of these wage increases unfolds, the impact on both employees and the brand’s presence in China will be closely monitored.