(Yicai) July 22 -- Fast Retailing, the Japanese firm behind the casual clothing retailer Uniqlo, said its earnings from China tumbled in the first half of the year, even as global sales grew. The head of its business in the country reportedly attributed the decline to a pivot toward “affordable alternatives” among Chinese consumers.

Fast Retailing’s revenue in China fell sharply in the three months ended May 31 following a particularly strong performance a year earlier as well as lower consumer demand, unseasonal weather, and a local product lineup that did not fully meet local needs, the Yamaguchi-based company announced on July 11.

It did not reveal the exact earnings figures, but said that its share of the Chinese market had shrunk to 22 percent this year from more than 40 percent in fiscal 2023.

“An increasing number of consumers are seeking to improve their quality of life in terms of safety, security, and health,” regional Chief Executive Pan Ning was reported as saying by Securities Times “There is growing interest in products that are reliable, comfortable to wear, easy to care for, and suitable for both everyday wear and sports.

“This trend is particularly evident among the younger demographic, who are more inclined towards cost-effective purchases,” he said. “Under the concept of 'affordable alternatives,' consumers are choosing more affordable products over branded products of similar quality.”

External factors such as poor weather and intensified competition among shopping malls along with internal reasons such as inadequate product mix and marketing also led to poor quarterly earnings results in China, Pan pointed out.

Fast Retailing also forecast its China earnings to decline in the second half of the fiscal year, adding that annual global income will rise, while profit will decline a little.

Global profit jumped 22 percent to JPY401.8 billion (USD25.5 billion) in the nine months ended May 31 from a year ago, while operating revenue rose 10.4 percent to JPY2.4 trillion (USD149.8 billion).

To boost growth from fiscal 2025, Fast Retailing said the firm will revise its store opening approach, more deeply integrate its physical and online retailing, tailor product offerings for each region, bolster local store management by developing leadership talent, and overhaul its business operations.

Uniqlo is training about 2,000 staff for livestream e-commerce because of the importance of online sales, Pan also noted.

Editor: Martin Kadiev