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Why Japanese brands are in-fluxing Indian market?

The growing fashion and Lifestyle space in India has attracted many Japanese retailers. Uniqlo is expected to open its first Indian outlet shortly.

Tags: MUJI, Miniso, Kai Group, Wacoal, Onitsuka Tiger

BY Shipra Srivastava  |  Oct 30, 2017  |  comments ( 0 )  | 
Why Japanese brands in-fluxing Indian market?

Japan is a growing country and had expanded its arms in India via automotive and consumer durable industry since long. Japanese brands were expensive and their dominance was restricted to Electronics and Auto. However, very recently we have seen a growing trend of Japanese retailers coming or ready to enter Indian fashion and lifestyle space which was always ruled by American and European brands. Many Japanese retailers including MUJI, Miniso, Kai Group, Wacoal, Onitsuka Tiger and many more have arrived Indian in last couple of months and many more are expected to open their doors in India. For example, fast fashion retailer Uniqlo is expected to open their first store by January 2018. As per the industry experts Uniqlo has all potential to create disruption in market and give stiff competition to H&M due to its unique pricing. Likewise, Japan based clothing company World Co. too will be opening to Indian market shortly. 

All these brands have extensive global presence, for example, MUJI has a strong global brand presence of 700+ stores across Japan, Asia, Europe and USA. Likewise, Kai Group and Miniso too have very large global presence. So, the question arises why these brands are coming to Indian market now though this market always had all the ingredients to attract any International player. 

 Why India now.. ?

There could be many reasons. For example, in recent years, Japan had experienced recession and to improve their GDP, the retail brands had to explore opportunities in different countries around the world. Japan is world’s third-largest economy, registering successive quarters of shrinking gross domestic product (GDP). Japan has seen low growth and deflation for 24 years. 

“Presently for Japan, India is a destinationwhere they cancapitalize on the market. The market is big enough to absorb large investments and has relatively high growth rates compared to peers. The Indian sectors are booming and welcoming. Growing consumer numbers, increasing purchasing power, access to Internet, access to credit, all of these are leading to growth in the economy and consumption of goods by consumers in rural and urban areas. This is a good time for any brand to enter India and get started on selling their products to consumers,” said Rupal Agarwal,Retail Management Consultant, Your Retail Coach. 

Along with the advantages, come disadvantages and challenges. Population of India has a different taste in all manners because of diversity and different culture and it could be a problem for a new brand to enter into a market. Competition is another challenge which is inevitable. 

“Companies need to invest in the brand awareness, customer engagement and loyalty. Regulatory challenges, supply chain and logistics are a few other challenges faced by the Japanese brands, until they are established. Inspite of the challenges, Japan has a fair advantage to settle their brands in India if they adapt to the consumer preferences, said Rupal. 

Speaking on same, Rajesh Pandya, Managing Director, Kai India said,“ Right now the relationship between India and Japan are best in the history. Mr. Modi and Mr. Shinz┼Ź Abe have jointly taken many steps in improving bilateral trade. Hence, the brands are also leveraging.”  The company plans to invest about 160 cr over next few years as the part of growth strategy. 

Expansion of Japanese brands in India

Miniso is the latest brand which have arrived India. Though the brand started in Japan but is owned by investors based out of China. Miniso had opened its first store in Japan and it was acquired by the some Chinese company and they opened biggest store in Guangzhou, China. Then they open 500 outlets in China before moving Singapore and Thailand. Later they moved to Europe then they open few stores in US. Brand’s India entry is kind of late; they have arrived here after opening close to 800-1000 stores across the world. 

As per leading retail leasing agency Jones Lang LaSalle(JLL),  Miniso has already singed-up close to 50-55 outlets till now which should be operational by 31st March. They would be doing the third launch by late November at DLF Mall of India, Noida. They intend to open 600 outlets in this country over next five years.

MUJi is yet another brand operational here since last three years now with Reliance brands and its offering includes a range of lifestyle products that include men’s and women’s clothing, childrenswear, innerwear, beauty, backpacks, suitcases, bathroom essentials, etc. The brand is very big but it is not getting that kind of approval from Indian customers may be due to pricing strategy. MUJI does not sell what is expected to sell. 

Likewise, ASICS Japanese multinational is constantly expanding here. Recently, they have recently open mono brand store Onitsuka Tiger at Palladium Mall, Mumbai. Onitsuka Tiger already has close to 200 stores across the world. 

Clearly, India is a huge market with a lot of growth potential. Japanese retailers do understand it very well and they are coming here with long term plans. 

 





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