By
Bloomberg
Published
Oct 6, 2023
Fast Retailing Co.’s Uniqlo brand will be scouting for more manufacturing partners in India to rapidly expand its operations after seeing a 60% jump in sales in the world’s most-populous nation.
“Our production in India has already started exporting to other countries. We are looking at expanding our partnerships with factories and mills,” Tomohiko Sei, chief executive officer of Uniqlo India, told reporters on Thursday in Mumbai as he inaugurated Uniqlo’s first store in India’s financial capital. “As a group, we want to grow our exports from India. As the India CEO, I want to see more local production.”
The Japanese apparel giant is currently working with over 20 sewing factories and mills in India that has enabled it to meet the federal government’s requirement of sourcing at least 30% of its inventory from local sources, according to Sei.
Uniqlo, which opened its first store in New Delhi in 2019, now has 11 stores in India and is planning to add a second store in Mumbai later this month. It posted a profit of 683 million rupees ($8.2 million) for the year ended March 31 on a revenue of 6.24 billion rupees — a surge of 60% from the year-ago period, according to filings with India’s corporate affairs ministry.
Sweet Spot
Amid China’s economic slowdown and geopolitical tensions with Western economies, India with its 1.4 billion people, young shoppers and rising affluence is emerging as a sweet spot for global companies looking for growth opportunities. The Centre for Economics and Business Research predicts that India may become a $10 trillion economy by 2035.
“Definitely there is a big opportunity in India because the population is very big and economic growth is very strong,” Sei said. “India is quite an important market, not just for Uniqlo but for all other companies.”
The retailer is entering a new expansion phase with an aim to eventually reach ¥10 trillion ($67.2 billion) in sales to become “a true global player,” founder and Chief Executive Officer Tadashi Yanai said in April. The company is targeting ¥5 trillion in sales in about five years.
Fast Retailing, which generates majority of sales from Japan and China, is pivoting its focus to markets such as North America, Europe and other parts of Asia as uncertainty around apparel demand has been on the rise due to geopolitical tensions between China and the US.
Another Japanese company Shiseido Co. is also vying for Indian consumers’ wallets. It is launching its first makeup brand in India in almost a decade and will open 14 stores in New Delhi and Mumbai this year with its partner Shoppers Stop Ltd.’s Global SS Beauty Brand.