A month ago, the Indian government had announced the Fast Retailing subsidiary’s move on its website, citing Uniqlo’s desire to “diversify its sourcing resources” and move away from China, its current manufacturing hub, due to rising production costs in the country. As garment manufacturer and retailer, Uniqlo produces more than 700 million items of clothing per year in factories in China, Vietnam, Bangladesh and Indonesia.
Woven garments are the strongest performing category of Uniqlo products in stores around the world, followed by knits. With 58 percent of all clothing exports, womenswear has a slight edge over menswear.
At the beginning of the month, Uniqlo had announced plans to open 1,000 stores in India over the next ten years. Though the retail giant has been eyeing the Indian market for a while and despite having stores in other Asian countries like China, South Korea, Malaysia, Thailand, the Philippines and Indonesia, Uniqlo yet has to open its first store in India.
Sourcing and selling parts of the production in the same country would reduce shipping routes and rates, thus easing the financial and environmental strain. Uniqlo is known for its local efforts, for example its Grameen Uniqlo stores in Bangladesh that produce garments exclusively for the Bangladeshi population.
Uniqlo currently operates 853 stores worldwide (as of August 2013) and generates net sales of 5 billion euros per year. In Japan, the brand has a 5.5 percent share of the 80 billion euro apparel market.