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Uniqlo to open stores in Vietnam

Released at: 17:25, 22/08/2018

Uniqlo to open stores in Vietnam

Photo: Uniqlo

Japanese casual clothing retailer eyeing new markets, including Vietnam.

by Minh Do

Casual clothing retailer Uniqlo plans to open stores in new markets, including Vietnam, Mr. Tadashi Yanai, founder and CEO of its parent, Fast Retailing, told Nikkei Asian Review.

“We want to have stores in all countries [in the region], especially Vietnam, Laos and Myanmar,” said Mr. Satoshi Hatase, Group Senior Vice President at Fast Retailing. “We opened our first roadside store in ASEAN in Thailand in March and it has been a huge success.”

A second stand-alone Uniqlo store has since opened in Thailand and more are planned for other Southeast Asian markets. The company has been talking to real estate brokers and developers to identify locations. The next promising countries are the Philippines and Malaysia, according to Mr. Hatase.

Uniqlo plans to double its number of stores in Southeast Asia and Oceania to about 400 by 2022, with an emphasis on stand-alone suburban stores meant to extend the brand’s reach beyond shopping malls.

The Japanese retailer aims to triple revenue generated in the region to 300 billion yen ($2.7 billion) in year ending August 2022, up from 100 billion yen ($906.7 million) last fiscal year. That would mark a faster rate of growth than for Uniqlo overall, which expects revenue to double to 3 trillion yen ($27.2 billion) over the same period.

Its suburban locations in Thailand draw extended families out for a casual day of shopping, as opposed to shopping malls, where Thais tend to feel a need to dress up, Mr. Hatase said. Everyone from grandparents to children come to the stand-alone stores, he said, adding that as the market starts to mature, consumers want the same shopping experience they can get in big cities but closer to their communities.

While Mr. Hatase said that Southeast Asian markets still have plenty of room for more store openings in shopping malls, Uniqlo’s new focus on stand-alone locations marks a change in its regional expansion. Uniqlo “has gained a certain level of recognition, so the timing is right,” he said. Stand-alone suburban locations were key to the chain’s growth in Japan.

Reaching 400 stores will put Uniqlo well ahead of leading competitors Zara and H&M in terms of bricks-and-mortar presence in the region, unless they are able to match the chain’s growth. The H&M group currently has about 130 stores in Southeast Asia and Oceania, while Zara owner Inditex has around 180. Uniqlo had about 180 as of February.

Besides Thailand, Uniqlo’s presence in the region covers Australia, Indonesia, Malaysia, Singapore and the Philippines.

Uniqlo brands itself as “life wear” as opposed to fast fashion, emphasizing functionality and lifestyle. But Mr. Hatase admits more needs to be done to make customers understand the difference. That will come through selling them quality clothing over the long term, he said.

Middle-and high-income Southeast Asian consumers are set to drive Uniqlo’s overall growth. “Lower-income people cannot buy Uniqlo [yet],” said Mr. Hatase, but “in ten years a significant number of ASEAN people will be able to.” That means growth beyond middle-income countries like Thailand.

The company is also looking to expand online sales in Asia and beyond. While Uniqlo has yet to launch e-commerce websites in the Philippines and Indonesia, Mr. Hatase confirmed the brand will have an online presence “within a few years.”

Also CEO of Uniqlo India, Mr. Hatase said the Indian market has the potential to become the next China - Uniqlo’s biggest market outside of Japan. The company has local production sorted out to meet domestic procurement requirements for foreign brands to operate in the country. The first store is set to open next year in Delhi. “Once its business takes off, we will think of the next step,” he said.

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