Uniqlo looks to Thai foothold

However, the industrial giant behind the brand is known for thinking big. Uniqlo - the company - now operates in more than 12 countries. It aims confidently to step up from its Japanese roots to become an Asian brand within 10 years, before finally becoming a truly global brand.

Its plans in Thailand are typically aggressive. It sees the country as a major foothold in the crowded market that will become the Asean Economic Community (AEC) in 2015. Uniqlo plans to open 100 stores in Thailand and employ about 10,000 local workers by 2020, as it sees the growing regional economy boosting its overall Asian expansion.

Uniqlo (Thailand) has been established as a joint venture between parent company Uniqlo and leading trading firm Mitsubishi Group, in which Uniqlo holds a majority stake of 75 per cent.

The company's first store in Thailand - its biggest shop in Southeast Asia - will open its doors today at CentralWorld. At first, all of its goods will be imported from its manufacturing supply sources in China, Bangladesh, Indonesia and Cambodia. Production will begin in Thailand in the near future, when the venture finds qualified partners.

The chief executive of Uniqlo in Japan, Tadashi Yanai, said in Bangkok yesterday that regional integration through the AEC would allow Uniqlo's business to grow in line with the larger population and market size.

"We foresee that Asean will shape up like the European Union economy within the next 10 years, and our business will grow in line with the market," he said.

However, despite the planned opening of 100 shops here within 10 years, Yanai declined to talk about sales targets in Thailand, saying it would take at least one year to see an operational result.

Although trade tariffs will be abolished under the AEC, the company is not planning to set up manufacturing plants in any Asean countries, but will seek suppliers. This strategy will encourage the company to join with suppliers that can produce for global markets.

Uniqlo hopes to reach 1,000 retail outlets in the Asean region.

"We target all customers, according to our established 'made for all' concept," Yanai said, adding that Uniqlo's combined sales in Asian markets would become bigger than its sales in the US and the EU.

Uniqlo's total sales revenue reached US$10 billion (Bt300 billion), with $1.5 billion in profit, last year. It forecasts total sales amounting to between $500 million and $600 million by 2020. Sales in Asia will account for two-thirds of that value. Currently, the brand is marketed in many major cities, including New York, Paris, London, Shang-hai, Beijing, Hong Kong, Taipei, Seoul and Moscow.

Uniqlo Group's executive vice president Naoki Otoma, who is also managing director for Uniqlo Asia and Japan, said the company planned to set up three outlets in Bangkok this year and one more shop by the beginning of next year.

Once more, despite Uniqlo's plans for 100 shops employing 10,000 people in Thailand, total investment estimates are not forthcoming.

"We can say that we focus on long-term investment in Thailand," Otama said.

He said his company already had local suppliers in Thailand, but he didn't want to name them.

Otoma, who will also manage the Asean operation, said the regional market should grow by 30 per cent, which will result in rising sales and profits. The region's growing economy will also create business opportunities in an environment of high investment, high demand and high spending.

Thailand is the biggest apparel market in the Asean region, while the Kingdom is also a strategically important country in Uniqlo's quest to become the leading apparel brand in Asia, he said.