DTI to entice Uniqlo brand owner to set up factories in Philippines

Filipinos shop for clothes and other items at the opening of Japan's Uniqlo brand clothing store at the Mall of Asia at suburban Pasay city, south of Manila, on June 15, 2012. The Philippine Department of Trade hopes to entice Japan’s Fast Retailing Co. Ltd., owner of the brand, to set up factories in the Philippines. AP PHOTO/BULLIT MARQUEZ

MANILA, Philippines—The Department of Trade and Industry (DTI) is assisting Japan’s Fast Retailing Co. Ltd. to develop the domestic market for its Uniqlo stores in the Philippines to jumpstart its expansion in the Asian market.

“We are helping the company grow its business in the Philippines to entice it to open up factories here,” Trade Undersecretary Cristino L. Panlilio said in a statement.

Currently, most of the company’s products are produced by its partner manufacturing companies in China and other Asian countries, but the government is hoping that the Japanese firm will soon consider putting up their factories here once the domestic market expands considerably.

Uniqlo is a brand of Fast Retailing Co., a global Japanese retail holding company that designs, manufactures and sells apparels for men, women and children. It has more than 1,100 stores in Japan and worldwide, namely in the US, UK, France, Russia, China, Hong Kong, Taiwan, Singapore, Malaysia, Thailand and Korea.

Panlilio said that Uniqlo’s holding company has to initially work with SM Retail Inc. to grow its market in the Philippines. Uniqlo was brought here through a joint venture between Fast Retailing Co. Ltd. and SM Retail Inc. to form Fast Retailing Philippines Inc., which will operate Uniqlo’s stores in the country.

“This is how a business relationship starts. Sometimes you do not immediately entice them right away to put up a company. The importer will get to like the Philippines and its market. When their business grows, the next thing they will think about is setting up a manufacturing facility here,” Panlilio explained.

He cited the case of Nestlé Philippines, which did not put a factory right away in the country 100 years ago. Nestlé was only selling goods in the country but when the local market was ready, they set up a local production company, he added.

“All of these multinationals like Procter & Gamble (P&G) and Unilever were only bringing their goods here. When they see the market, they do not instantly set up a factory,” Panlilio said.

During their recent courtesy call with President Benigno S. Aquino, the Japanese businessmen discussed possible investments in the country that would provide employment opportunities for the Filipinos.

Fast Retailing Philippines Inc. recently opened its first store at the SM Mall of Asia in Pasay City, and said it plans to open 50 Uniqlo stores in the country within three years.

“I am surprised with the Filipino hospitality that my colleagues are showing. This will be a great asset for the expansion of the business in this country and globally,” Katsumi Kubota, chief operating officer of Fast Retailing Philippines, was quoted as saying.

With the intrinsic hospitality of Filipinos, the Philippines is seen as a strategic location for the Uniqlo’s Asian and global market expansion. The company initially hired 123 employees for its first store in the country. It intends to hire more Filipinos to operate the additional stores it will open in the coming years.

Aside from this, Kubota said that a small portion of its products are already produced by local manufacturing companies.

Currently, Fast Retailing has a partnership with Luen Thai. Luen Thai is a manufacturing company that has partnerships with other well-known brands and retailers globally like Adidas, Dillard’s, Esprit, Limited Brands, Polo Ralph Lauren and Targus, among others.

“The opening of the first Uniqlo store has special impact. Once they start shopping here, wear our products, and realize the real value of our products, they will come back for us. This is a very good sign for our business,” Kubota said.

Read more...