SUMMARY
The brand is also scaling up its offline presence with two new stores in Mumbai
With the expansion of our brick-and-mortar stores, we still aim to maintain the online store portion at the same level: Uniqlo CEO
In addition, the company is increasing its local sourcing and said that it was on track to achieve 30% domestic sourcing
Japanese clothing brand Uniqlo, currently deriving around 15% of its total sales from online channels in India, is also expanding its physical retail footprint.
“We set and achieved our target of 15% when launched our e-commerce platform in 2021. With the expansion of our brick-and-mortar stores, we still aim to maintain the online store portion at the same level. This, of course, differs from month-on-month basis seasonality and store opening,” Uniqlo CEO Tomohiko Sei said.
Currently, Uniqlo has its offline presence in North India, including 8 stores in Delhi NCR. It plans to launch two stores in Mumbai at Phoenix Marketcity and Oberoi Mall.
The company is also planning to establish a presence in the southern markets, particularly in cities like Bengaluru, Hyderabad, and Chennai, where it identifies strong demand for its products through its ecommerce platform.
In addition, the company is increasing its local sourcing and said that it was on track to achieve 30% domestic sourcing, as per FDI policy. Under the current rules, 100% FDI is permitted in the single-brand retail trade with a rider of 30% mandatory local sourcing to promote micro, small and medium enterprises (MSMEs).
The global expansion comes at a time when Fast Retailing, the owner of Uniqlo, said last month that its nine-month profit soared 22% as its business in China continued to recover from a pandemic slowdown, and it raised its full-year forecast to a new record.
Its operating profit rose to $2.38 Bn in the nine months ended on May 31, from $1.96 Bn in the year-earlier period. The company raised its full-year profit forecast to $2.7 Bn from $2.6 Bn.
While Uniqlo is scaling up its presence in India, Shein is coming back to India on the back of a Reliance-Retail partnership, Urbanic is also bolstering its D2C presence with a new brand identity, and homegrown D2C fashion brands are also tapping on growing appetite and demand for fashion products amongst indian masses.
Amid rising competition, fashion has emerged as the largest category in online retail in India due to a maturing user base, accounting for 37% of the overall online shopping in FY23, according to RedSeer, a consulting firm.
