Some reports have criticised Shoprite’s newest venture: a basics clothing line that not-so-subtly copies the successful Uniqlo brand, which was originally started in Japan. However, since most of South Africa’s clothing brands are built on foundations that ‘borrow’ fashion trends from the northern hemisphere and replicate them here, the criticism of Shoprite may be unfair.
Instead, given Shoprite’s pedigree, formidable scale and extensive resources, it's arguably more important for investors and competitors to keep a close eye on how this new venture is performing…
It will be many years before UNIQ is material to the Shoprite group; and going by prior precedent, its performance may also never be separately disclosed to shareholders, irrespective of how significant the brand becomes to profitability.
With that in mind, we set out to answer four questions to help analysts evaluate UNIQ’s performance to date, and to use this early evidence to contextualise its potential scale in the future.
- How is UNIQ performing? We look at the market share it has gained since launch in March 2023.
- Who is shopping at UNIQ? We compare the income and age demographics of UNIQ shoppers, compared to other 22seven users.
- What is UNIQ’s market positioning? We contrast the average transaction values at UNIQ with other clothing retailers.
- What is UNIQ’s potential market share? We compare the spending of 22seven users at UNIQ stores in two malls in Cape Town (Canal Walk, the first in the country, and Table Bay Mall) with other retailers in the same malls, including Mr Price, Ackermans, CottonOn, PnP Clothing, Edgars and others.
How is UNIQ performing?
In June 2023, UNIQ accounted for a respectable 30bp of the aggregate spending of all 22seven users at the 140+ clothing and footwear brands that we track. This puts it on a par with a host of other recognisable outlets.
In the chart below, we compare user spending at UNIQ with spending at JAM Clothing and G-Star. These brands were selected because all three had the same share of spending during the period, and JAM and G-Star are useful extreme examples that we can use to highlight differences in each retailer’s market positioning. Insights data allows us to split market share into three factors:
- Number of customers: Is there an increase or decrease in the number of customers transacting?
- Frequency: Are customers shopping more or less frequently compared to previous periods?
- Average transaction value: Are customers spending more or less per transaction?
Lets begin with the number of customers. In this example, nearly twice as many 22seven users shopped at JAM Clothing than at UNIQ, and nearly 10 times more users shopped at UNIQ than at G-Star.
The difference in frequency of purchases is less significant: during the same period, the average customer made 1.2 purchases at each of these stores.
Average transaction value shows the reverse trend to number of customers: the average purchase at G-Star is nearly 3.6x greater than the average purchase at UNIQ, and ~7x greater than what users spend at JAM Clothing.
The chart highlights that JAM is a high-volume, low-value retailer, whereas G-Star is a premium outlet. UNIQ seems to sit between these two extremes, and the overall result (so far) is that each of these retailers, despite different positioning strategies, make up a similar proportion of total user spending.
Who is shopping at UNIQ?
Digging deeper, we separate the users who have shopped at UNIQ into age and income brackets and compare this to the distribution of all 22seven users. The results suggest...
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Simon Anderssen
simon.a@22seven.com
+27 84 730 0309
