Core Viewpoint - The article discusses the negative consumer experience at Uniqlo stores in China, highlighting issues of surveillance and privacy violations, which have led to a backlash against the brand [2][6][18]. Group 1: Consumer Experience and Surveillance - Many consumers have reported feeling uncomfortable due to being closely monitored by staff, with some even being followed and photographed under the suspicion of theft [3][6]. - Internal reports indicate that certain Uniqlo stores have a practice of labeling suspicious customers as "11号" (No. 11), leading to invasive monitoring and sharing of their images among staff [7][10]. - The practice of surveillance is reportedly directed by regional managers, indicating that it is a systematic approach rather than isolated incidents [6][12]. Group 2: Impact on Business Performance - Uniqlo's parent company, Fast Retailing, reported a global revenue increase of 9.6% and a profit increase of 16.4% for the fiscal year 2025, but the Greater China region saw a revenue decline of 4% and a profit drop of 12.5%, marking the first time both metrics fell in this market [21][23]. - The decline in performance is attributed to changing consumer preferences, with younger shoppers seeking more unique and fashionable options rather than basic items, which Uniqlo primarily offers [27][28]. - The company has begun to shift its strategy from aggressive store expansion to focusing on fewer, higher-quality flagship stores that enhance customer experience [29][30]. Group 3: Future Strategies - Uniqlo is attempting to improve its market position by enhancing store experiences and integrating digital services, such as online ordering and in-store pickup [31][32]. - However, regaining consumer trust after the surveillance incident may take considerable time, and the competitive landscape in the Chinese apparel market is intensifying [33][34].

Core Viewpoint - Uniqlo, once celebrated for its high cost-performance ratio, is facing challenges in the Chinese market due to intensified competition and changing consumer attitudes, leading to a decline in both revenue and profit in its largest overseas market, Greater China [2][4][7]. Financial Performance - Fast Retailing Group reported a record revenue of 3.4 trillion yen for the fiscal year ending August 31, 2025, a 9.6% increase year-on-year, with operating profit at 551.1 billion yen, up 13.6% [3]. - Uniqlo remains the core brand, contributing approximately 2.9 trillion yen, or 86% of total revenue, but reliance on a single brand poses risks [3][4]. - Greater China revenue fell to 650.2 billion yen, a 4% decline, with operating profit down 12.5% to 89.9 billion yen, marking the first instance of simultaneous revenue and profit decline in recent years [4][6]. Regional Performance - Japan's Uniqlo revenue surpassed 1 trillion yen for the first time, growing 10.1%, while international business revenue reached 1.91 trillion yen, up 11.6%, accounting for 56% of total revenue [3][4]. - In contrast, Greater China's revenue accounted for about 19% of total revenue, still higher than North America's 8% and Europe's 10.9% [4][6]. Market Dynamics - The rise of domestic brands and "alternative" products has eroded Uniqlo's price advantage, with consumers increasingly turning to local brands and cheaper alternatives [7][8]. - Uniqlo's pricing strategy is under scrutiny, as consumers express concerns over perceived value, with many opting for alternatives that offer similar styles at lower prices [7][8]. - The company is adjusting its store strategy, reducing the number of outlets in lower-tier cities while focusing on flagship stores in first-tier cities, indicating a shift from expansion to efficiency optimization [8][9]. Future Outlook - Fast Retailing plans to drive growth in the Chinese market through business restructuring and digital transformation, projecting a revenue increase to 3.75 trillion yen for the fiscal year 2026, a 10.3% year-on-year growth [6].