Uniqlo has applied to open stores in India, in a bid to rival fellow fast-fashion retailers Zara and H&M, two global firms that are already dominating the Indian retail landscape.
The Japanese fashion brand, owned by Fast Retailing Company, has officially submitted its proposal to the Department of Industrial Policy and Promotion (DIPP), which will allow it to set up single brand retail stores in India.
As per India’s foreign direct investment (FDI) policy, 100% equity investment is allowed in single brand retail trading. FDI of up to 49% is permitted automatically, however in respect of proposals involving FDI beyond 51%, it is mandatory to source 30% of the value of goods purchased from India.
In regards to Uniqlo, it remains unclear how much the Japanese firm will be investing, but India is intent on expanding its global reach via India and was expected to enter the Indian market this year. The firm has delayed its launch, citing location issues to set up their stores.
“Fast Retailing believes India is a market with great potential, and can confirm that the company has taken the first step towards a later introduction of Uniqlo to customers in India. At the moment, we are awaiting word from the government, and we will be able to discuss potential future steps at a later date,” a spokesperson of Fast Retailing in Tokyo told the Economic Times.
Fast Retailing had record net profits of 119.2 billion yen (895.5 million euros) in the financial year ended in August, up 148% on the previous year according to the company’s accounts. Revenue increased by 4.2% to 13.9 billion euros.
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However, Uniqlo’s local Japanese market has softened due to poor consumer sentiment in the region, and as a result, Fast Retailing has had to look elsewhere – mostly in Asia and the US – to garner revenue growth. The firm more recently launched apparel vending machines as a soft-launch in the US, to test the retail waters.
In November 2017, the group said Tadashi Yanai, the founder and president of Fast Retailing, would retire in 2019.