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Uniqlo to double Southeast Asia footprint by 2022

'Life wear' chain chases growth beyond malls into standalone stores

This Uniqlo in the Bangkok suburb of Phatthanakan is the Japanese retailer's first roadside store in Southeast Asia. (Photo by Akira Kodaka)

TOKYO -- Casual clothing retailer 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, a senior executive said.

The Japanese retailer aims to triple revenue generated in the region to 300 billion yen ($2.71 billion) in the year ending August 2022, up from 100 billion yen last fiscal year. That would mark a faster rate of growth than for Uniqlo overall, which expects revenue to double to 3 trillion yen over the same period.

"We opened our first roadside store in ASEAN in Thailand in March, and it has been a huge success," Satoshi Hatase, group senior vice president of Uniqlo parent Fast Retailing, told the Nikkei Asian Review in an interview.

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. The next promising countries are the Philippines and Malaysia, according to Hatase.

In Thailand, the suburban locations 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, 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 as they can get in big cities, but closer to their communities.

While 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.

Satoshi Hatase, group senior vice president of Fast Retailing, said roadside stores are key focus in Southeast Asia.

Reaching 400 stores will put Uniqlo well ahead of leading competitors Zara and H&M in terms of brick-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 has 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 "LifeWear," as opposed to fast fashion, emphasizing functionality and lifestyle. But 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]," Hatase said, but "in 10 years, a significant number of ASEAN people will be able to." That means growth beyond middle-income countries like Thailand.

Fast Retailing founder and CEO Tadashi Yanai has said that Uniqlo plans to open stores in new markets, including Vietnam. "We want to have stores in all countries [in the region]," Hatase said, especially Vietnam, Laos and Myanmar.

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, Hatase assured that the brand will have an online presence "within a few years."

Hatase, who is also CEO of Uniqlo India, said the Indian market has the potential to become the next China -- Uniqlo's biggest market outside of Japan. The company has the local production sorted out to meet domestic procurement requirements for foreign brands to operate in the country, he said.

The first store is set to open next year in Delhi. "Once its business takes off, we will think of the next step," Hatase said.

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