Home >Industry >Retail >Uniqlo eyes 15% sales via e-commerce in India

NEW DELHI : Japanese fashion retailer Uniqlo has commenced full-scale e-commerce operations in India months after launching limited online deliveries as the pandemic fast-tracks e-commerce adoption among shoppers.

E-commerce sales could contribute 15% of the retailer’s sales over the next few years, a top executive at the company said.

In October 2020, Uniqlo India launched a ‘Shop-From-Home’ initiative as intermittent lockdowns and fear of the virus kept consumers away from stores. The company had then called the site an “interim solution" as it actively engaged in building a more comprehensive shopping site and app.

Meanwhile, online deliveries picked pace for most retailers. As a result, Uniqlo preponed its full-scale e-commerce launch.

“We did the six stores in India and also now we have preponed and opened the fully functional e-commerce (site). Last year, in the first year of pandemic, we opened a temporary solution as a delivery service—shop from home. Then after that we found a very positive reaction and also people's demand for Uniqlo brand is very high," Tomohiko Sei, chief executive officer, Uniqlo India, said in an interview with Mint.

Through the new online store, customers now have the option to either receive their purchases through home delivery or opt for ‘click and collect’ at a Uniqlo store with no minimum purchase amount, the company said in statement.

The updated site as well as the shopping app are now live.

E-commerce sales ratio can easily surpass the average sales of each store. “And also, my personal target is 15% of total company sales," Sei said.

Uniqlo will host its largest inventory via its online store—a total of over 12,000 stock keeping units will be offered online.

The new online store offers nationwide delivery of a complete line-up of LifeWear items for men, women, kids and babies, it added. The e-commerce site will service over 17,000 pin codes initially , Sei said.

Several large global fashion retailers have firmed up direct e-commerce operations in India—including Inditex’s Zara, Swedish retailer H&M as well as furniture retailer Ikea.

These companies are likely to gain from stand-alone shopping sites as more consumers spend hours browsing online. Uniqlo said it’s not partnering with marketplaces for online sales.

India’s apparel and accessories market is estimated at $67 billion or roughly 8% of the overall retail market, according to a 2020 report by Technopak. Of this—14% sales are generated via e-commerce (as of FY20)—by 2025 close to 20% of all apparel sold in India will be sold online. This will be a $16 billion market opportunity.

This is especially key in the aftermath of the pandemic that has accelerated consumer shift towards online shopping.

Uniqlo entered India in 2019—with its first store in the capital city of New Delhi—it now has a total of six stores in Delhi-NCR.

Sei said that temporary store closures both in 2020 and the ongoing fiscal impacted sales at the retailer known for its casual clothing. However, the retailer has also seen some fundamental shifts in shopping behaviour—with shoppers now more focused on essential wear, he said.

“The one big change, for example, is for comfort clothing—like lounge wear demand is increasing, and also the athleisure demand is increasing so that's yoga, jogging, running. We have a UT (range) which are graphic T-shirts—that category also increased," he said.

Globally the retailer lowered its profit forecast for the ongoing fiscal as a fresh surge in cases in several markets cast uncertainty. In the third quarter of FY2021, or the three months from March to May 2021, Fast Retailing Group revenue increased 47.2% year-on-year. However, the retailer saw brisk sales of masks, lounge wear and products that benefitted as consumers spent longer hours at home and swapped formal, occasions wear for comfort clothing, Reuters said in a 15 July report.

Meanwhile, in India, offline expansion for the retailer will continue as planned.

“We never stopped the expansion of offline stores. We were always looking for new store locations and discussing with vendors. Even with online developing, I believe direct consumer touch point or human touch point is very important for our business. That's why we don't stop, or we don't reduce our expansion plans offline," he added.

Sei said the retailer is eyeing more cities and states beyond Delhi-NCR .

“We are looking for very many states, we cannot disclose the store names…and in the near future, we can open more stores," he added.

Uniqlo, part of Japan's Fast Retailing Co. Ltd, operates close to 2,280 stores worldwide. It is among the top apparel retailers globally.

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