New Delhi: UNIQLO founder and chairman Tadashi Yanai — Japan’s wealthiest man — who runs one of the world’s largest apparel retail company Fast Retailing Group said the company has made significant investments in India ahead of the brand’s maiden store launch in the country on Friday.
Yanai, 70, who was in New Delhi for the store launch declined to share investment numbers for Indian market but added that importing apparel, and putting together stores here comes at a cost. “I’m not at liberty of disclosing any of the numbers," Yania said when asked about the company’s investments into India’s nearly $800-billion retail market. “But you have a commitment and it means huge amount of investment is behind it. It is not only about having a store but all about creating garments and transporting garments and listening to customers. Each one of these acts are very costly so it always involves a huge amount of investment," Yanai told Mint in an interview on Thursday. He added that the country’s 1.3 billion population makes India an “extremely important" market for the company, which is currently competing with Inditex and H&M to sell more garments globally.
The store, spread over three floors, located at Delhi’s Ambience Mall sells the brands’ signature light down jackets, basic t-shirts for men and women, formal wear, and apparel for kids.
UNIQLO is set to open two more stores as part of the brand’s multi-store launch strategy here. Both the upcoming stores will be located in the Delhi-NCR area.
But shoppers in other markets will have to wait, as UNIQLO wants to get a firm footing in its maiden market here, and gauge shoppers' response before expanding to cities.
“At the moment we are single-handedly focusing on Delhi," Yanai said. “We would like to do a very good job in Delhi first. If our business is successful in Delhi, I’m sure other cities in India may come to us to open stores," said Yanai who opened the first UNIQLO store in the city of Hiroshima in 1984 said. UNIQLO today has over 1,300 stores the world over, and is a key player in Japan’s apparel market. Its minimalist styles, defined cuts, and designer associations along with its use of high-tech fibre in some of its clothing draws shoppers across the world.
Fast Retailing is the world’s third-largest apparel retailer after H&M and Inditex (that owns Zara).
In India, UNIQLO now join the likes of Swedish apparel brand H&M, and Spain’s Zara that are increasingly chasing aspirational urban shoppers in India’s top cities who are spending more on looking and dressing better. However, its entry in the market is a bit belated compared to other brands who have already established their presence here. Yanai, however said the company is drawn to the Indian market for the long-term. “We wanted to listen to customers in India and based upon that we want to offer products."
Recently, Finance Minister Nirmala Sitharaman further relaxed India’s sourcing norms for single-brand retailers making it easier for brand’s such as UNIQLO to sell goods here. This means that Fast Retailing Group, which owns seven other fashion labels, such as GU, Theory, etc could launch more brands here. “When it comes to India and China whenever we see a good opportunity for any of our brands we are willing to bring them. As long as we witness the opportunity," Yanai said.
In July, the company also announced opening of a India specific website, as part of its pre-launch activation, although the website does not let users shop, for now.
Yanai, who is also an External Board Director and Independent Officer at Japan’s SoftBank Group Corp, said that online sales in India will not start in the “immediate but in the near future".
“We are interested in launching online. But as I said, we need to first educate ourselves about the local Indian market therefore we are not interested in launching a website (immediately) without getting to know the market," he added.
The company’s latest store in India has put over its entire range on sale, with t-shirts for men starting ₹490; formal men’s shirts were are priced between ₹1,990 to ₹2,490. Its iconic ultra light down vest jackets start at ₹3,490 and go up to ₹4,990.
On pricing, Yanai added that high import duties imposed in India have impacted the brand’s pricing here. “Our pricing will be influenced by import duty but in general rather than import duty there is no other element to higher prices as compared to other global markets. Shoppers here can be price conscious but if we offer quality we should be confident," he said.
Yanai also said the group plans to increase its sourcing from India, which is still a small quantum of what it sources from China, and other Asian markets. it already works with partner factories in Bengaluru.
For the year ended 31 August, 2018, Fast Retailing Group posted global sales of approximately 2.13 trillion yen or $19.17 billion. The company has around 2,200 stores in 24 markets including Japan.
