Published
Jul 20, 2017
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Japanese fashion brand Uniqlo’s India entry on hold

Published
Jul 20, 2017

As global fashion brands like Zara, H&M, Gap look to expand their footprint in India’s rapidly growing fashion segment, Japanese brand Uniqlo has kept its India entry on hold citing location issues to set up their stores.


Uniqlo.com


 Uniqlo was expected to foray into the Indian market this year after planning a wholly-owned subsidiary, like global rival Hennes and Mauritz (H&M) to set up stores in a country rated as the most promising retail market in the world by AT Kearney report. India allows 100% foreign direct investment in single brand retail.

Uniqlo was in talks with a host of Indian companies for a joint venture however after talks fizzled out the Japanese fashion brand decided to go on its own in the country and launch stores this year.

However, the fast fashion giant is struggling to find quality retail space in North India where it was planning its first few stores leading to a delay in its India entry by a year, the Economic Times reported quoting sources.

Global fashion brands are finding it difficult to find quality & feasible retail space in India especially in the metropolitan cities of India. High pricing of these global brands also makes it difficult for them to venture into tier II & III cities due to lack of sales.

Uniqlo has said that the company is reviewing the Indian market currently and will decide regarding its India entry at the right time.
 
"As a global apparel company, Uniqlo works with a number of external companies to help us find possible locations in both existing markets as well as new markets. We have made no press announcement regarding plans to enter the Indian market," said a company spokesperson to ET. "Like in both existing markets as well as new markets, Uniqlo looks at and reviews a number of possible locations before making a decision."

There is a lot of potential in India’s booming fashion sector, however it is important to find the profitable formula for the price-sensitive India market. Many global brands like Gap and Zara initially struggled due to high operational costs and started making profits only after slashing prices in the country.

India’s retail sector is expected to double to $1.1-1.2 trillion by 2020 from $630 billion in 2016 at a compound annual growth rate (CAGR) of 12%, according to a joint report released by FICCI (Federation of Indian Chambers of Commerce and Industry) and consultancy PricewaterhouseCoopers.

Global brands like Uniqlo are not in a hurry and taking its time doing their market research before entering India to reap the benefits of this booming retail sector. 

 

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