Step into Uniqlo’s store in Amsterdam’s bustling Koningsplein district, and the first thing that catches your eye isn’t the merchandise—it’s the towering mural spanning three floors, created by local artist Sandy van Helden. The artwork features young people of various skin tones strolling, cycling, and walking their dogs under massive tulips. The exaggerated proportions between people, landscapes, and animals are a signature of van Helden’s style.
“The building itself is Jugendstil, and it happens to be located where the city’s flower market once stood. So, I wanted to blend the energy of Amsterdam with its iconic tulips, reflecting how locals navigate the city—whether by bike or on foot,” van Helden told 36Kr.
Jugendstil, meaning “young style,” refers to a restrained, German and Austrian interpretation of the Art Nouveau style. It is geared toward floral motifs, arabesques, and organically inspired lines, with modern influence of abstraction and functionalism.
Across Europe, Uniqlo is making an effort to win over local consumers by collaborating with regional artists and opening flagship stores in prime locations. This marks a stark contrast to the strategy it employed in China during the first two decades of the 21st century. In China, Uniqlo didn’t try to assimilate into local culture. Instead, it sought to transplant a distinct, Japanese-inspired style into the market.
Now, with China’s growth slowing, Uniqlo has ramped up its investments elsewhere—particularly in the US and Europe. These regions currently contribute around 20% of parent company Fast Retailing’s annual revenue, and the figure continues to rise.
Second time’s the charm
On a weekday afternoon at 3 p.m, Uniqlo’s Koningsplein store remains consistently busy. Near the entrance, its latest “C” collection—yet to be released in China—is prominently displayed, while a few discounted down jackets hang in a corner on the first floor. On the wall, a thought-provoking question is written: “What makes our lives better?”
When it comes to store count, Paris is undoubtedly Uniqlo’s “Shanghai” in Europe. But testing the waters in Amsterdam may be a better indicator of the brand’s long-term viability on the continent. The Dutch capital isn’t as aggressively fashion-forward as other European cities, making it a more balanced proving ground. English is widely spoken, the city has a youthful demographic, and people tend to have their own sense of style, independent of social media algorithms. Uniqlo aims to be another option in their already diverse wardrobes.
According to 36Kr, the Koningsplein store attracts not only tourists but also a significant number of locals, ranging from their 20s to 60s. Many customers enter the store with a clear sense of purpose, a sign that Uniqlo’s brand awareness has already taken root in the city.
Uniqlo’s latest financial reports suggest that its overseas business, particularly in the US and Europe, is driving growth. Takeshi Okazaki, senior executive director and CFO of Fast Retailing, has said that new stores opened in these regions have been largely successful, significantly boosting brand recognition.” The company plans to increase its overseas capital expenditure for Uniqlo by 76% in fiscal 2025, reaching JPY 101.2 billion (USD 688 million).
What few people realize is that Uniqlo first entered the European market at the same time it ventured into China. In the early 2000s, Uniqlo attempted to establish a presence in London. Initially, founder Tadashi Yanai hired experienced luxury fashion executives to lead the expansion, but they soon left due to fundamental disagreements over strategy. Uniqlo replaced them with Japanese executives, but cultural clashes between the new management and local employees persisted. Despite rapid expansion—opening 50 stores in the UK—mounting losses forced the company to shutter all but five within four years.
Following this setback, Uniqlo shifted to a more cautious approach in Europe, outsourcing its French and British operations to local distributors and adopting a “one profitable store at a time” strategy elsewhere. For nearly a decade, Uniqlo remained focused on just four European countries: the UK, Germany, Italy, and France.
Its journey in North America has been even more challenging. Uniqlo first entered the US in 2005 with a store in New Jersey, only to pull back due to poor performance. A year later, it made a second attempt by opening a flagship store in New York’s SoHo district, but results remained lukewarm. In 2012, Uniqlo tried again, this time by acquiring a local brand. Yet, even today, it remains far from achieving consistent profitability in the US.
In 2019, a senior Uniqlo executive shared with the media three factors under consideration when the company decides whether to enter a new market: whether consumers would welcome it, whether macro and microeconomic conditions are ideal, and whether it is fully prepared to serve this new market.
Western consumers don’t automatically embrace Uniqlo’s aesthetic. The Nordic countries have their own fast fashion powerhouses. Parisians and Milanese once dismissed Uniqlo as too monotonous, though not quite in the functionalist way that appeals to Germans. In the US, shoppers are accustomed to department store retail and have traditionally preferred a more European-influenced aesthetic—at least initially.
The tide began to shift in the spring of 2020 when the Covid-19 pandemic swept across Europe. Strict lockdown measures forced many brick-and-mortar retailers to shut their doors, creating an unexpected boost for e-commerce.
In fiscal 2019, online sales accounted for just 20% of Uniqlo’s European revenue. By fiscal 2021, that number had surged to 30%, with most online shoppers being first-time buyers.
Taku Morikawa, Uniqlo’s Europe CEO, noted that European consumers already had a tradition of wearing knitwear at home, so Uniqlo’s high-end cashmere offerings helped drive revenue growth. The success of its online store established brand awareness, and after lockdowns were lifted, Uniqlo accelerated its physical expansion across Europe. As of January this year, the brand had grown to 79 stores on the continent.
Of course, the macroeconomic landscape had also undergone major changes. The post-pandemic era brought supply chain disruptions and rising oil prices, driving up costs for essential goods. Inflation forced consumers to cut back on discretionary spending, including apparel.
Yet, when measured against local purchasing power, Uniqlo remains competitively priced in Western markets. In the US, it has been described as the “Gen Z’s Gap,” thanks in part to its affordability. A pair of Uniqlo jeans sells for USD 40, a hoodie for USD 30, and its signature down jacket for around USD 70—comparable to H&M and Zara but with a reputation for better durability.
At the Koningsplein store, just a wall away from Uniqlo, COS sees only a trickle of shoppers. A single tote bag there costs over EUR 200 (USD 217.1), enough to buy at least ten of Uniqlo’s popular “dumpling bags”—which were named an “it bag” by fashion trend tracker Lyst. A short walk away, Arket—another H&M Group brand—has resorted to selling bagels and coffee on its first floor to attract foot traffic.
Finding its footing
After years of careful expansion, Uniqlo has steadily established itself in Europe—far from an overnight success, but a calculated and methodical one. In contrast, its North American journey has been filled with repeated failures, making it one of Yanai’s greatest frustrations.
By fiscal 2017, after years of losses, Uniqlo’s US business finally started showing signs of stability under its fourth CEO, Hiroshi Taki. Losses were cut in half, and after a long and difficult climb, profitability was finally within reach. In fiscal 2018, US losses were reduced by another 50%, and by fiscal 2019, the company expected to break even.
Then came the pandemic, dealing Uniqlo another blow. But unexpectedly, the crisis also revived demand for casual wear. The brand’s minimalist, logo-free aesthetic gained popularity, and its “dumpling” mini shoulder bag became a runaway success in Western markets. Sensing the shift, Yanai seized the moment to accelerate expansion, announcing plans to open 30 new stores in North America and Europe each year. The appointment of former North America CEO Daisuke Tsukagoshi as Uniqlo’s new global CEO further underscored the importance of the Western market.
In 2024 alone, Uniqlo opened 11 new stores across the US, including six in California and five in Texas. Both states house large Asian communities.
But this doesn’t mean Uniqlo is only popular among ethnic Asians. According to 36Kr, Uniqlo selects store locations based on e-commerce sales data. California, with its thriving tech sector, and Texas, with its vast geographical reach, consistently rank among the top three US states for online shopping penetration.
Recently, Uniqlo set a bold goal: opening 200 stores in the US by 2027, up from its current 72. Analysts believe that to reach this target, e-commerce will play a crucial role. Uniqlo still lags behind competitors like Gap and Abercrombie & Fitch, which, as homegrown brands, have more physical stores and a stronger omnichannel presence. These two rivals already generate over 50% of their revenue from online sales, whereas Uniqlo’s e-commerce contribution is estimated to be just 10%.
However, Uniqlo has its own advantages. Its standardized sizing and limited seasonal design changes make online shopping more predictable for customers. Regular, predictable discounts also make price comparisons easier. To boost online sales, Uniqlo has rolled out services in the US allowing customers to buy online and pick up purchases in-person, along with free shipping regardless of order size.
Uniqlo’s in-store experience also stands out. “It’s spacious, bright, and meticulously organized,” a New York shopper told 36Kr. Collaborations with local artists give each store a distinct touch. “Walking into Uniqlo, you feel like the brand is speaking directly to you.” As the market matures, the brand has to fine-tune its strategy to align with local tastes.
Uniqlo’s momentum in both Europe and North America appears strong, but challenges in sustaining its growth remain.
In an October 2023 interview with Nikkei, Yanai made it clear that Fast Retailing would not adopt a “China+1” strategy where companies diversify their supply chains away from China to reduce risk. Instead, he reaffirmed the company’s commitment to Chinese manufacturing. “We’ve grown alongside China’s textile industry, and its importance hasn’t changed,” he said.
Yanai elaborated on the scale of China’s manufacturing advantage:
“A single factory in China has tens of thousands of young workers, whereas a typical Japanese factory has only about a hundred. It’s not easy to build large-scale manufacturing plants outside of China. We’ve spent years refining our supply chain there. Vietnamese factories simply can’t match China’s efficiency unless we send a massive number of Japanese staff to oversee operations.”
Of Fast Retailing’s 397 partner factories, 211 are located in mainland China, followed by 61 in Vietnam and 26 in Bangladesh. It also sources materials from 155 textile mills worldwide, with 75 based in China.
This deep reliance on Chinese manufacturing is increasingly at odds with US trade policies. As of now, the U.S. imposes a 25% tariff on Chinese imports. Any enactment of tariffs on Chinese goods in the US would likely result in price hikes.
Regulatory risks are another concern. In 2021, US customs blocked a shipment of Uniqlo shirts over concerns that they contained cotton sourced from Xinjiang, a region under scrutiny for alleged human rights violations. At the time, Uniqlo’s US sales accounted for just 5–7% of its global revenue, making the impact relatively minor. However, as Uniqlo grows increasingly dependent on the US market, even small disruptions could have major consequences.
Yanai is undoubtedly aware of these risks. Yet, he remains convinced that Uniqlo’s survival depends on global expansion:
“Japanese companies must recognize that Japan lacks natural resources. … Our only option is to earn money in international markets. We can only thrive in open economies.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by He Zhexin for 36Kr.