The Next Big Thing
    Category: Companies & People By : Sonya Angraini Read : 1681 Date : Wednesday, June 12, 2013 - 09:39:48

    Courtesy of Fast Retailing Co.

    Japan's apparel company Fast Retailing Co., controlled by Tadashi Yanai, Japan's richest man with an estimated net worth of $16 billion, will open its first Uniqlo outlet in Indonesia this month in a 2,700 square meter space. Fast Retailing has big ambitions to make Uniqlo the world's number one brand, competing against its long-time rivals GAP, H&M and Zara. Naoki Otoma, group executive vice president at Fast Retailing, says this is achievable but first Uniqlo has to be the leading brand in Asia. To do so, Tadashi wants to expand Uniqlo in Southeast Asia, including Indonesia. The attraction here, says Naoki, is the country's booming middle class. “If we don't succeed in Indonesia, we will not succeed in Southeast Asia,” he says, during a soft launch in February.

    Fast Retailing has 1,231 Uniqlo stores worldwide (the name is an abbreviation of unique clothing). As many as 854 stores are located in Japan, 355 stores in the rest of Asia, and 22 stores in Europe and the U.S. Fast Retailing has six brands in total but Uniqlo contributes roughly 80% of the company's total of $10 billion in net sales, a 13% increase from the same period a year ago (for the fiscal year ending in August 2012). For the current year, the company estimates sales to reach $11 billion. The company is on track to achieve its target as it posted $6 billion in net sales for the first half of fiscal 2013.

    A report by consultancy McKinsey shows that the Indonesian apparel market is predicted to be worth $57 billion by 2030, up from $22 billion in 2012. This means more opportunities for retailers. Anton Sitorus, head of research at real estate firm Jones Lang LaSalle feels the retail market can continue to grow in both the short and long term. “Local retailers are growing at good rates, and there are still only a few international players in the market,” he says, adding that merchants such as Malaysia's Parkson and Sweden's H&M will also soon enter the Indonesian market. “These new players will trigger growth of malls and trade centers, both in urban and suburban areas,” he says.

    In Indonesia, Fast Retailing plans to open 10 Uniqlo stores over the next three years. For the first Uniqlo store, the concept and products will be the same as other Uniqlo stores worldwide but along the way, Fast Retailing will tailor its offering to cater to local tastes, Naoki explains. “The performance of our first store here will largely determine our next move,” he adds. The company will sell clothing for men, women and children at prices ranging from Rp 59,000 to Rp 699,000.

    He also emphasizes that Uniqlo's clothing are suitable for a wide range of consumers, as its clothing are meant to be basic everyday wear. Naoki says he isn't worried about rivals. “We don't think other brands as our competitors,” says Naoki. For Uniqlo, he says, other brands will actually help broaden the market, which will help Uniqlo in the long run.