FAST RETAILING

Fast Retailing in Indonesia

Fast Retailing in Indonesia

Introduction

The apparel industry in Indonesia is growing steadily over the past few years. Although it is a major producer of clothing, most of its production is exported. However, with the constant rise in consumer purchasing power, the trend is changing with the demand of clothing increasing. Despite being a major producer of clothing, it lacks the production of premium quality products. In order to fill this gap, premium quality products are imported from China and other Asian countries (Apparel, 2012).

Overall Strategy

Fast Retailing co., ltd. is an apparel store chain that operates throughout Russia, Singapore, France, US, South Korea, Hong Kong, China, and UK. Apart from providing retail services, it also produces apparels in Asian nations in order to take advantage of the low cost of production. The company is constantly growing and its plan to expand in Indonesia seems to be a good decision since the demand for apparel there is on a rise. Along with this, considering the fact due to geographic similarity in the region, Fast Retailing will not to make major changes to its offering (Bloomberg business week, 2013).

Since Indonesia has a huge population of Muslims, it would be a good strategy if Fast Retailing tries to capture the market of conservative clothing for women. There is a high demand for such clothing and in order to make the demand greater, the company can use its strengths in designing to produce stylish clothes that are in conformity with the religious practises of the country.

Along with this, the company should also cater to the needs of people living on the islands that are at a distance from the main cities. The reason is that Indonesia is a densely populated region and even tiny islands may be home to thousands of families that are not being targeted by major retailing chains. This provides a golden opportunity for the company as they will almost have a monopoly (Iida, n.d.).

Target Market

The target market of Fast Retaining in Indonesia should be the middle class since this segment of the economy is booming. Therefore, targeting this sector will have the biggest benefit because of the higher revenues and prospects for growth. Having one of the biggest middle class populations in the world, targeting this class in the Indonesian market is the best option.

Source: (Walter, 2006)

Since Indonesia is a major producer of clothing, Fast Retailing will not have to face any major supply chain issues. In case the demand cannot be met by local producers Fast Retailing will have plenty of sources in China and Bangladesh that are very near and hence will be able to deliver the goods at cheaper prices. The transportation costs will also be low because of the geographical position of Indonesia with respect to China and Bangladesh (UNIQLO Business Model, n.d.).

With the middle class economy of Indonesia booming, Fast Retailing has a great opportunity to tap this market in order to increase its revenue. The advantage of targeting Indonesia instead of other ...