The Jakarta Post
Japanese fashion brand Uniqlo has officially announced its plan to open a flagship store in Jakarta by mid 2013, hoping to benefit from the dynamic retail market in the capital.
The store is being touted as the second biggest in Southeast Asia.
Uniqlo is one of the brands under Fast Retailing Co. Ltd., a holding company for six other brands, including Comptoir des Cotonniers. Fast Retailing is a leading apparel retailer in Japan that has grown to be the fourth largest worldwide.
Naoki Otoma, Uniqlo CEO for Asia Pacific and group executive vice president of Fast Retailing Co. Ltd., said that Uniqlo would use their flagship store to gauge future expansion.
“[Whether or not] we decide to expand [our business] will depend on the success of this first store’s appeal to consumers,” he said, adding that the company plans to open 10 stores in three years time.
He, however, declined to specify the investment necessary to set up operations in Indonesia.
Otoma further added that Uniqlo had partnered with Mitsubishi Corp. to set up the local arm, PT Fast Retailing Indonesia, to run operations in Indonesia.
“We are working with Mitsubishi as they have conducted business in Indonesia for many years,” he said.
He added that the holding company held a 75 percent stake in the local arm, while the remaining 25 percent goes was held by Mitsubishi.
Yasuhiro Hayashi, PT Fast Retailing Indonesia chief operating officer, said that the flagship store in Jakarta would only be a few meters shy of their largest store in Southeast Asia, which is located in Thailand.
“The store in Jakarta will measure nearly 2,700 square meters,” he said.
Uniqlo has 1,206 stores in 13 markets worldwide, including China, the US and France.
In Southeast Asia, the brand operates 23 stores across Singapore, Malaysia, Thailand and the Philippines. However, Japan, with 848 stores, remains Uniqlo’s chief market.
Uniqlo’s flagship store in Jakarta, he said, would be located at Lotte Shopping Avenue, a shopping area attached to the Ciputra World 1 mega project in Kuningan, South Jakarta.
The retailer, he further said, would inaugurate the store by June this year although marketing campaigns through social media would kick off in March.
He further said that this flagship store would carry approximately 500 styles of apparel for men, women and children priced roughly between Rp 59,000 ( US$6.12 ) and Rp 699,000.
He emphasized that the brand did not target a specific market as Uniqlo aimed to provide basic clothing items that were suitable for a wide range of consumers. This concept differentiates Uniqlo from its competitors, he said.
In general, big retailers, such as PT Mitra Adi Perkasa ( MAPI ) and their portfolio of over 100 global brands, have actively pursued middle class consumers, who are growing in both number and income.
The country’s robust economy, marked by gross domestic product ( GDP ) growth surpassing 6 percent, has propelled the rise of the middle class.
McKinsey expects that 90 million people will have graduated into the consumer class, denoted by annual net incomes surpassing $3,600, by 2030. This consumer class spells fresh business opportunities worth $1.8 trillion, with the consumer sector reaping considerable benefits.
Otoma added that Indonesia’s robust economic condition, in addition to being the fourth most populous country worldwide, spelled potential.
“We are confident that we can repeat the positive results we’ve have seen in other Southeast Asian countries, in Indonesia,” he said.
The Indonesian fashion apparel market is predicted to be worth $35 billion in 2015, from $21 billion in 2010.
He added that the promising Indonesian retail sector was incremental in achieving the company’s aim to be the premier apparel retailer in the Asian region.
Fast Retailing earned ¥928.6 billion in overall net sales as of August 2012. Uniqlo, meanwhile, collected ¥773.1 billion, 19.1 percent of which came from its international stores.
Net sales from international stores, however, grew by 63.4 percent year-on-year between 2012 and 2011, while Japan operations only grew by 3.3 percent.
Otoma added that good business in Indonesia could mean more production orders to domestic factories the holding company has consigned orders to. However, he declined to reveal the number and production volume coming out of these factories.