Uniqlo plans large manufacturing presence in India, ET Retail

Fast Retailing, the parent company of Uniqloare looking to establish a substantial production presence IN India through about 20 ‘production partners’, many people familiar with the development told ET.

As one of the world’s most valuable clothing retailers, Uniqlo already has a group of manufacturing partners in India and is looking to expand this network through a significant investment, they said. without sharing any estimated amount.

“The amount of investment will be significant because Uniqlo is very serious about India and sees it as an important market,” one person said. “Unlike the existing facilities in India, which are more for export, the manufacturing partners Uniqlo will bring to India will be exclusively for the domestic market.”

One of the company’s manufacturing partners with whom ET spoke has confirmed that their current mission is to manufacture for export only.

Uniqlo, Asia’s largest clothing brand, says India is one of its top priority markets, where consumers are increasingly switching from ‘fast fashion’ to long-lasting essentials and functional clothing.

The company’s ambitions for India are huge as CEO Tadashi Yanai points out that he wants Uniqlo to be “the best-selling retailer in India”.

The Japanese brand opened its doors for the first time in September 2019, but the strict lockdown measures announced to prevent the outbreak of the pandemic in March 2020 delayed the expansion plan.

The brand is currently planning to enter Mumbai and Bangalore. It opened stores in Lucknow and Chandigarh after Delhi.

Uniqlo does not own any factories. Instead, it outsources most of its production to factories outside of Japan.

According to a report titled ‘The Uniqlo case: fast retail formula for casual clothing market leadership’, this model allows Uniqlo to keep breakeven low and improve profitability invest.

“As we expand our global sales, we continue to grow our network of partner factories in countries such as Vietnam, Bangladesh, Indonesia and India,” the company said on its website. mine.

According to the list of garment factories, as of March 1, 2023, Uniqlo has 227 factories in China, 54 in Vietnam, 33 in Bangladesh, 13 in Indonesia and 16 factories in India and Japan along with several other locations.

As the world’s second most populous country, India is an attractive market for skin brand, especially with young people increasingly favoring Western-style clothing.

Over the past decade, global brands Zara and H&M have been market leaders in the fast fashion segment in India.

Devangshu Dutta, founder of retail consulting firm Third, said: “For global brands, India should be one of the most affordable sourcing hubs thanks to its integrated manufacturing sector according to large vertical and on the other hand, the growing domestic market is driving demand”. Vision, told ET. “However, its share in sourcing baskets has so far been low for a number of reasons, even though China has been seen by the management teams of brands and retailers,” he said. for decades as a centralized sourcing risk.

Uniqlo’s existing domestic manufacturing partners include Shahi Exports, Brandix Lanka, tangerine design, Maral is abroadShingora Textiles, Silver Spark Apparel, SM Lulla Industries Worldwide and Penguin Apparels.

According to Fast Retailing’s first half results, the company said its revenue was 1.4672 trillion yen, or about $10.2 billion, and operating profit rose to 220.2 billion yen (1 $.53 billion), supported by strong performance from operations in several regions. including India, where it said it generated a significant increase in both revenue and profit.

for Uniqlo InternationalSpecifically, the company said revenue reached 755.2 billion yen ($5.25 billion), while operating profit was 122.6 billion yen ($852.93 million).

The company said regions like India “reported significant increases in revenue and profit as they entered the full-fledged growth phase”.

  • Published on June 29, 2023 at 11:15 am IST

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