Uniqlo embraces ‘Make in India’ as it spreads its wings in India
05 July 2023, Mumbai
On October 4, 2019, Japanese retailer Uniqlo opened its first store in India, at New Delhi’s Ambience Mall, a new milestone for the company in what it believes will be one of its most important markets in the world.
The India launch also marked the debut of Uniqlo’s concept of LifeWear - apparel that comes from the Japanese values of simplicity, high-quality, and longevity, made for everyone, everywhere.
Today, Uniqlo has nine stores in India, with seven in Delhi-NCR and one each in Chandigarh and Lucknow. Mumbai and Bangalore stores are next on the list.
India to be the biggest South Asian production hub
Bangladesh is one of its most important manufacturing hubs, Uniqlo is now planning to set up its second South Asian manufacturing hub and has chosen India specifically for its domestic market which represents a huge growth opportunity for the brand.
USP; While the Bangladesh manufacturing hub follows the export model as do the current Indian ones, the Uniqlo manufacturing hub in India will follow the domestic sales model to support the Japanese label in its expansion across the country.
The brand is serious about Indian consumers as they see clothing preferences in India are aligning with international trends which is an advantage for Uniqlo to leverage. The new partnership will be a team of 20 Indian manufacturing houses.
India was the dormant but now active choice
Experts say, despite its clear visibility in terms of availability of raw materials, skilled labour force, manufacturing infrastructure, and relatively lower energy costs, India has been overlooked by most international fashion brands as the preferred partner as they are fully aware of the risk exposure.
First hand; Reiterating the brand’s strategic move, CEO, Tadashi Yanai says, Uniqlo’s ambition is to be the best retailer across India. The company is set to make a high-value investment to ensure local manufacturing partners are able to deliver as per Uniqlo’s standards.
It must be noted that globally, Uniqlo does not own a single manufacturing unit but partners locally. Called ‘Core Partner Factories’, Uniqlo has 227 factories in China, 54 in Vietnam, 33 in Bangladesh, 13 in Indonesia, and 16 factories in India and Japan among several other locations.
Currently, Uniqlo’s core partner factories in India include Shahi Exports, Brandix Lanka, Tangerine Designs, Maral Overseas, Shingora Textiles, Silver Spark Apparel, SM Lulla Industries Worldwide, and Penguin Apparels.
The Uniqlo Strategy for success in India
Surprisingly, when Uniqlo launched in India, it did not compete with high-street Zara and H&M. Instead, adding a whopping 25 percent to their pricing, worked. Uniqlo India reported a profit of Rs 21.4 crore for the fiscal year ending March 2022 compared to a loss of Rs 36.1 crore in the previous financial year.
The Japanese retailer’s India sales jumped 63 percent year on year to Rs 391.7 crore in 2021-2022. The other part of the strategy was deep penetration of a certain area, known as the cluster approach. Again, it worked as other regions wait in anticipation.
Fast Retail’s performance upbeat
Uniqlo’s parent company Fast Retailing has been doing consistently well across the globe.
As per its first-half results, the company said its revenue was $10.2 billion, and operating profit rose to $1.53 billion, due to its strong performances from operations in several regions, including India where it generated a significant increase in both revenue and profit.
Uniqlo also stated regions like India have reported significant revenue and profit gains as they enter a full-fledged growth phase.
