Japanese brand Uniqlo, Asia’s largest apparel retailer, is all set to enter India.
The Fast Retailing Co-owned brand, popular for its casual clothing in solid colours and iconic lightweight jackets, has sought the approval of India’s department of industrial policy and promotion (DIPP) to undertake single-brand retail trading in the country.
If its proposal is cleared, Uniqlo will join the ranks of fast-fashion brands such as Zara, Forever 21, and H&M to open stores in Asia’s third-largest economy, where fashion retail is a $70 billion business. And here, its range of winter-wear, polos in solid colours, linen shirts, and other minimalistic offerings could well lure legions of young, aspiring shoppers hunting for branded clothing.
While Uniqlo’s positioning and fashion are visibly different from that of Spanish retailer Zara and Swedish label H&M, with more focus on basic clothing and a strong line-up of winter wear, the brand will have to work on its pricing, communication, and styles to suit Indian shoppers, said retail experts.
That’s because, unlike in other Asian markets, the brand is quite niche in India. “Not too many Indians know it as (well as) they know a Zara or H&M, so expansion is going to be a big challenge,” Pankaj Renjhen, managing director-retail at real estate consultancy JLL India, said. “Since Uniqlo is a basics brand…its positioning will have to be in line with that, which means the sizes and pricing will need to be tailored to India.”
But what is likely to work for Uniqlo is its plain linen shirts and trousers that may find takers among India’s young office-goers seeking business casuals. Also, the Japanese firm offers a mix for both men and women, unlike Zara and H&M that mostly target the later. “While Zara and H&M are high on the fashion quotient, Uniqlo will have an appeal with the more young, office-going crowd as it offers casual wear at affordable prices,” said Ankur Bisen, vice-president of retail and consumer products at Technopak. “It also has a wide range for both men and women.”
Uniqlo’s interest in India comes at a time when the retailer, which first opened a shop in Hiroshima in 1984, has been expanding its presence outside Japan where it holds a 6.5% share of the apparel market. In its most recent earnings report, the Fast Retailing Co posted a record operating profit of $1.57 billion for the year ended August 2017, bolstered by a jump in Uniqlo’s international business.
For India, it has spent years evaluating the country’s policies. India allows foreign retail companies to invest directly in single-brand retail trading (pdf) but has local sourcing requirements. Top Uniqlo officials have on several occasions met Indian government representatives to discuss its India debut. “India is a market with great potential,” a company spokesperson told Bloomberg, adding, “At the moment, we are awaiting word from the government, and we will be able to discuss potential future steps at a later date.”