Japan’s Uniqlo takes plunge in uncertain India retail market

Tadashi Yanai, founder and president of Japanese retail giant Uniqlo, speaks during the opening of the company's first Indian store in New Delhi. (AFP)
Updated 04 October 2019

Japan’s Uniqlo takes plunge in uncertain India retail market

  • The Uniqlo outlet, one of more than 2,000 across the world, is spread over 3,250 square meters
  • However, India is notorious for its price-sensitive consumers

NEW DELHI: Japanese clothing giant Uniqlo on Friday opened its first store in India, one of its largest worldwide, becoming the latest global retailer to plunge into the huge but tough developing market.
The South Asian nation, with its 1.3 billion population and a burgeoning middle-class, is viewed by global brands as a major prize but weak consumer demand has hit the economy in recent months.
The Uniqlo outlet, one of more than 2,000 across the world, is spread over 3,250 square meters — and almost next to global rival Sweden’s H&M in an upmarket mall in New Delhi.
“I’m not worried,” the billionaire founder of Uniqlo’s operator Fast Retailing, Tadashi Yanai, said Thursday ahead of the opening, the first of three planned in and around the Indian capital.
“Fast Retailing has long wished to open stores in India, in view of the tremendous potential of a nation of 1.3 billion people ... (with) an average age of 27,” he added in a speech.
Uniqlo is among more than 300 international fashion brands expected to open stores in India in the next two years, according to a November report by consultancy McKinsey and the Business of Fashion trade publication.
McKinsey said that the vast nation’s apparel market was forecast to be worth $59.3 billion in 2022, making it the sixth-largest in the world.
However, India is notorious for its price-sensitive consumers, while ethnic wear still infuses much of local fashion, particularly among women.
Uniqlo is attempting to address the second point by including for the Indian market a “Kurta collection” created in collaboration with an Indian designer.
But on price, Uniqlo so far appears to be selling its clothing at similar levels as in the United States and Australia, and more expensive than in Malaysia.
One signature item, a women’s ultralight down vest for women, retails at 3,490 rupees ($49.10) compared to $49.90 in the US and 149.90 ringgit ($35.80) in Malaysia.
“India is a highly competitive market, and a lot of global brands are already here, along with many successful home-grown brands,” Edelweiss Securities analyst Abneesh Roy told The Print news website.
“Uniqlo is definitely entering late, and it will not be easy.”
On Friday around 500 shoppers of a mix of ages queued up to enter the new store when it opened, with Yanai there to welcome them.

Bank jobs go as HSBC and Emirates NBD reduce costs

Updated 15 November 2019

Bank jobs go as HSBC and Emirates NBD reduce costs

  • Others have also reduced headcount amid economic downturn and property market weakness

DUBAI: HSBC Holdings has laid off about 40 bankers in the UAE and Emirates NBD is cutting around 100 jobs, as banks in the Arab world’s second-biggest economy reduce costs.

The cuts come amid weak economic growth, especially in Dubai, which is suffering from a property downturn.

HSBC’s redundancies came after the London-based bank reported a sharp fall in earnings and warned of a costly restructuring, as interim CEO Noel Quinn seeks to tackle its problems head-on.

HSBC has about 3,000 staff in the UAE, part of a nearly 10,000-strong workforce in the Middle East, North Africa and Turkey.

The cuts at Dubai’s largest lender Emirates NBD came in consumer sales and liabilities, one source said, while a second played down the significance of the move.

HSBC and Emirates NBD declined to comment.

“The cuts are part of cost cutting and rationalizing to drive efficiencies in a challenging market,” the second source said.

Other banks have also reduced staff this year. UAE central bank data shows local banks laid off 446 people in the 12 months until the end of September. Foreign banks added staff in the same period.

Staff at local banks account for over 80 percent of the 35,518 banking employees in the country.

The merger between Abu Dhabi Commercial Bank, Union Commercial Bank and Al Hilal Bank saw hundreds of redundancies.

Commercial Bank International (CBI) said it would offer voluntary retirement to employees in September, which sources said saw over 100 departures. Standard Chartered, too, cut over 100 jobs in the UAE in September.

Rating agency Fitch warned in September a weakening property market would put more pressure on the UAE’s banking sector.