Home ／ Insights on entering the Indian market
2026.03.26
With a population of over 1.4 billion, India is rapidly growing into one of the world's largest consumer markets. The retail sector in particular is recording annual growth of over 10%, driven by progressing urbanization, the expanding middle class, and accelerating digitalization. Uniqlo and Muji, Japan's leading apparel and lifestyle-goods brands, have made a full-scale entry into this massive market, each pursuing market development with its own distinct strategy.
This article analyzes in detail both brands' rollout status, pricing strategy, location selection, and localization measures in the India market, and provides practical insights for Japanese food companies considering entry into India.
Fast Retailing, which operates Uniqlo, opened its first India store at Ambience Mall in New Delhi in fall 2019. Since then, it has steadily opened more stores, reaching about 18 stores across India as of 2025. It continues to open stores at a pace of about 3 per year, expanding its business centered on major cities such as the National Capital Region (NCR), Mumbai, Bengaluru, and Pune.
Notably, it opened a store at Orion Mall in Bengaluru in June 2025. With a sales floor of 860 square meters, this store targets the young, affluent population of Bengaluru, a hub of the IT industry. Fast Retailing positions India as a strategic growth market and envisions expansion to a scale of hundreds of stores over the long term.
Uniqlo's India business achieved the remarkable feat of turning profitable within just 3 years of entry. Since entering in 2019, its average annual growth rate (CAGR) has been about 60%, and it has recently maintained growth of about 44% year on year. It has set a target of 44% growth year on year for FY2025-26 (FY26), showing strong intent to expand its presence in the India market.
Factors supporting this rapid growth include, in addition to solid sales at existing stores, the rapid growth of its e-commerce business. However, unlike other global brands, Uniqlo does not list on third-party marketplaces such as Amazon, Flipkart, or Myntra, instead taking a strategy of concentrating on its own e-commerce platform.
Uniqlo's price range in India is set at a mid-range of 2,000-8,000 rupees. This is somewhat higher compared to prices in Japan, but compared to global competitors such as Zara and H&M, it has established a positioning of "a fair price matching the quality." It maintains a delicate balance of being affordable for India's rapidly expanding middle-class middle class, while not undermining its brand value.
Uniqlo is also actively working on localization for the India market. Its local sourcing ratio is currently 15-20%, but it has announced plans to raise this to 30%, and has also revealed a vision of positioning India as a "global sourcing hub."
However, challenges remain. In expanding into new markets such as Mumbai, Pune, and Bengaluru, detailed demand forecasting and optimization of the product mix are required, covering seasonal demand fluctuations, color variations, and size ranges. Since climate and culture vary greatly by region in India, a uniform, all-India product rollout cannot fully address these needs.
Ryohin Keikaku (MUJI) was a pioneer among Japanese household goods retailers in fully entering the Indian market (Daiso preceded it among Japanese retailers, entering via franchise in 2009). In 2016, it established a joint venture, "Ryohin Keikaku Reliance India," with Reliance Brands, part of India's largest conglomerate, the Reliance Group. With an ownership split of 51% for Ryohin Keikaku and 49% for Reliance Brands, the structure gave the Japanese side management control while drawing on the local partner's expertise in Indian distribution and real estate.
This Local partners partner selection was one of the most important decisions in Muji's India strategy. Reliance has a retail network spanning all of India and real estate negotiating power, and is a partner with a strong track record in helping foreign brands enter India.
Muji opened its first store at Palladium Mall in Mumbai in August 2016, and subsequently opened stores in Bengaluru and New Delhi as well. Its initial store size was relatively small, at 4,000-5,000 square feet, but the joint venture with Reliance plans to roll out large-format stores of about 22,000 square feet, aiming to greatly expand its product assortment.
In addition, Ryohin Keikaku established "MUJI Global Sourcing" in India in 2024, responsible for product development and production management, showing a move to position India not merely as a sales market but as part of its global supply chain.
Muji's biggest challenge is pricing. Even Muji, known in Japan as an "affordable brand," can end up perceived as a "premium brand" in India due to price increases from import tariffs and logistics costs. To close this price gap, expanding local production and developing products dedicated to the India market have become urgent priorities.
Comparing Uniqlo's and Muji's India strategies, several clear differences emerge. Uniqlo has taken an aggressive store-opening strategy, expanding to 18 stores within just 6 years of entry, while Muji has expanded cautiously while deepening its collaboration with Reliance.
In terms of location strategy, both brands have opened stores centered on upscale malls in Tier 1 cities, but future growth will require expanding into Tier 2 cities. The main driver of India's consumption growth is shifting to regional cities such as Pune, Ahmedabad, Jaipur, and Chandigarh, and how to develop these markets is a medium- to long-term challenge.
The two brands are also contrasting in their digital strategies. Uniqlo takes a strategy of concentrating on its own e-commerce, emphasizing direct control over the brand's world. On the other hand, since India's e-commerce market is dominated by Flipkart and Amazon India, how far reach can be extended through own-brand e-commerce alone remains uncertain.
A challenge common to both brands is the overwhelming diversity of the India market. Made up of 28 states and 8 union territories, India has language, food culture, climate, and purchasing habits that differ greatly by region. In addition, companies must also respond to India's unique regulatory environment, the complex tax system (GST), and business customs that vary by state.
Lesson 1: Be Prepared for at Least 3 Years to Reach Profitability
Uniqlo achieving profitability in 3 years is a very fast pace for entry into India. However, this result was only possible thanks to the knowledge cultivated through the company's global expansion and sufficient initial investment. To become profitable in the India market, Japanese food companies should build their business plans on a timeframe of at least 3-5 years.
Lesson 2: Selecting a Local Partner Determines Success or Failure
As Muji partnered with Reliance, collaborating with a trustworthy local partner is extremely important in the India market. In the food industry, FSSAI (the Food Safety and Standards Authority of India) obtaining licenses and permits, building a cold chain, and gaining access to local distribution networks are among the many challenges difficult to solve without a local partner.
Lesson 3: Design Pricing Strategy on "India's Own Standard"
A "reasonable price" in Japan can become a "premium price" in India. Food companies should clarify their strategy: either develop products at a price point matching local purchasing power, or clearly target the premium segment. A half-hearted price point carries the highest risk of failure.
Lesson 4: Localization Extends Beyond "Taste" to the "Entire Experience"
Just as Uniqlo adjusts product sizes and colors for the India market, food companies also need comprehensive localization that goes beyond spice blends and sweetness levels to include package design, sales channels, and promotional methods.
Lesson 5: A Phased Rollout with an Eye on Tier 2 Cities
A realistic approach is to first validate the market in Tier 1 cities such as Delhi NCR, Mumbai, and Bengaluru, establish a successful model, and then expand into Tier 2 cities. India Market is not simple enough to roll out nationwide in one leap.
When Japanese food companies enter India, they face challenges distinct from those of retail brands. First, India has the world's largest vegetarian population, making it essential to understand religious and cultural dietary constraints. In addition, India's food safety regulations have been rapidly developed in recent years, and registration with FSSAI and compliance with labeling regulations are mandatory.
Regarding cold chains as well, India's refrigerated distribution infrastructure is still developing, posing a major hurdle especially for companies handling fresh food and dairy products. On the other hand, this challenge, viewed from another angle, suggests the possibility of capturing first-mover advantage as refrigerated distribution infrastructure develops.
India's organized retail (modern retail) accounts for only about 10% of total retail sales, with the remaining 90% held by traditional small stores (kirana stores). This structure is projected to change significantly over the next decade, with the share of modern retail expected to reach 20-25% by 2030.
This change is a major opportunity for Japanese food companies. As modern retail expands, demand for high-quality imported food and premium food also grows. In addition, with the rise of the D2C (Direct to Consumer) model, methods of reaching consumers directly without going through traditional distribution channels are also becoming realistic.
Uniqlo's and Muji's entry into India offers valuable precedents for Japanese companies to succeed in the India market. What emerges from both brands' strategies are three common principles: "long-term commitment," "selecting the right local partner," and "thorough localization."
When Japanese food companies enter the India market, they should refer to these precedents while also formulating a comprehensive entry strategy that adds cultural gaps measures for food-specific regulatory compliance and this challenge; doing so will be key to success.
Uniqlo opened its first store in New Delhi in 2019 and has steadily expanded its stores since then. It is said to have achieved profitability at an early stage and maintained a high growth rate, focusing on aggressive store openings centered on Tier 1 cities and its own e-commerce.
While Uniqlo concentrates on aggressive store openings and its own e-commerce, Muji is expanding cautiously through a joint venture with a major local company. On pricing, Uniqlo has established a mid-range that matches its quality, while Muji faces the challenge of prices rising due to tariffs and logistics costs, often leading it to be perceived as a premium brand.
This is because local knowledge is essential for distribution, real estate, and regulatory compliance in India. In the food industry especially, there are many challenges, such as obtaining FSSAI licenses, building a cold chain, and gaining access to local distribution networks, that are difficult to solve without a local partner.
This is because prices rise due to import tariffs and logistics costs, causing brands that are affordable in Japan to sometimes be perceived as premium in India. Companies should clarify their strategy: either develop products priced to match local purchasing power, or clearly target the premium segment, since a half-hearted price point is said to carry the highest risk of failure.
The overwhelming diversity of the India market. Made up of numerous states and territories, language, food culture, climate, and purchasing habits differ greatly by region. Companies must also respond to a complex tax system and business customs that vary by state, and future growth is said to require developing Tier 2 cities such as Pune and Ahmedabad.
The lessons are to plan for a timeframe of several years to reach profitability, choose a trustworthy local partner, design pricing strategy on India's own standard, carry out comprehensive localization covering not just taste but also packaging, channels, and promotion, and establish a successful model in Tier 1 cities before expanding in stages into Tier 2 cities. In addition, food-specific measures such as vegetarian accommodation and FSSAI registration need to be added.
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