Fast Retailing, the parent company of Uniqlo, is attempting to establish a sizable manufacturing presence in India through 20 “production partners,” according to insiders who spoke to ET.
One of the most valuable apparel shops in the world, Uniqlo, already has a group of production partners in India and wants to grow this network through a sizable investment, they added without providing an estimate for the sum.
One of the individuals stated, “The investment amount will be big since Uniqlo is very serious about India and regards it as a key market.” Unlike the current facilities in India, which are more geared towards exports, the production partners that Uniqlo will bring to India will be specifically intended for the domestic market.”
One of the company’s production partners, whom ET contacted, verified that their present mandate is to manufacture primarily for export.
The largest apparel company in Asia, Uniqlo, claimed that India is one of their top priority markets since there, people are progressively turning away from “fast fashion” and towards functional clothing and long-lasting necessities.
The firm has high expectations for India, with CEO Tadashi Yanai saying he wants Uniqlo to become the “best-selling retailer in India.”
The Japanese company’s first door was opened in September 2019, but the growth plan was put on hold when strict lockdown measures were made public in March 2020 to contain the pandemic breakout.
The company currently has entry plans for Bangalore and Mumbai. After Delhi, it already has stores operational in Lucknow and Chandigarh.
No factories are owned by Uniqlo. Instead, it contracts with manufacturers outside of Japan to produce practically all of its goods.
According to the company’s website, “As we increase our global sales, we continue to grow our partner factory network in nations like Vietnam, Bangladesh, Indonesia, and India.”
As of March 1, 2023, according to their list of clothing factories, Uniqlo had 227 factories in China, 54 in Vietnam, 33 in Bangladesh, 13 in Indonesia, 16 in India, and 16 in Japan, among other countries.
India, the second-most populous nation in the world, is a desirable market for clothing companies, especially because young people are embracing western fashion more and more.
Global retailers Zara and H&M rose to the top of the fast fashion sector in India over the previous ten years.
Shahi Exports, Brandix Lanka, Tangerine Design, Maral Overseas, Shingora Textiles, Silver Spark Apparel, SM Lulla Industries Worldwide, and Penguin Apparel are some of Uniqlo’s current local production partners.
According to Fast Retailing’s first-half results, the business reported revenue of 1.4672 trillion yen, or roughly $10.2 billion, and an operating profit of 220.2 billion yen, or $1.53 billion. These figures were boosted by strong operations in a number of regions, including India, where the company claimed it saw significant growth in both revenue and profit.
Particularly with regards to Uniqlo International, it was reported that sales totaled $5.25 billion, or 755.2 billion yen, while operating profit was $852.93 million, or 122.6 billion yen.
As they transitioned into a full-fledged growth phase, countries like India, according to the business, “reported significant revenue and profit gains.”
