Uniqlo's entry price point – a shade lower than Rs 1,000 – will not impact customer demand, the company said.
Japanese retailer Uniqlo that is set to open its second India store on Thursday counts the market to be central to its business strategy. India CEO Tomohiko Sei says the firm wants to ‘expand very rapidly’ in the country.
“India is a very big market and has a huge population. Expansion is definitely a long-term vision,” Sei told FE in an interview. The launch of the store, located in Gurgaon’s upscale Cyber Hub, comes within a span of about two months since the opening of its first outlet in New Delhi’s Ambience Mall.
The retailer is understood to have generated over Rs 2 crore in sales in the first two days of its operation. Sei did not elaborate on sales numbers but said “it is on track”.
“When it comes to India, there is no limit on investment as long as it is necessary,” Sei said. Uniqlo, however, entered India almost 10 years after competitor Zara while Swedish-based H&M made its foray into the country in 2015. The fast-fashion retailers posted higher revenues in the year to March 2019 – Zara that operates 22 stores across 10 cities saw its total revenue increase to Rs 1,437.87 crore from Rs 1,221.67 crore in FY18.
Profit after tax, nonetheless, dipped to Rs 71.49 crore in FY19 against Rs 82.59 crore in the previous year, the company’s annual report showed. H&M reportedly made over Rs 1,200 crore in revenue during the period compared to about Rs 893 crore in FY18 while net profits increased nearly 29% to Rs 45 crore in FY19.
Analysts at McKinsey & Company estimate Indian clothing market to touch $53.7 billion in 2020, making it the sixth-largest globally. The domestic retail industry is expected to reach $1,200 billion by 2021 and $1,750 billion by 2026. Of the total retail market, food and groceries comprise the largest share, followed by apparel and footwear, according to analysts at Deloitte.
Uniqlo’s entry price point – a shade lower than Rs 1,000 – will not impact customer demand, the company said. Sei said the company’s LifeWear concept is new to Indian consumers and distinguishes it from its rivals. “We deliver value and quality,” Sei added.
Earlier this year, Tadashi Yanai, chairman and president at Fast Retailing that owns Uniqlo, had said high import duties affect product pricing in India. Local sourcing at present is not very significant.