Global Report

Why Uniqlo is opening stores in Bangladesh

Japan’s cheap-chic giant gives back.

A new Uniqlo storefront in Dhaka's upscale Banasree neighbourhood (Photo: Munem Wasif)

A new Uniqlo storefront in Dhaka’s upscale Banasree neighbourhood (Photo: Munem Wasif)

Over the past 20 years, Bangladesh has become a company town for the garment trade, building its hopes of economic growth to a staggering degree on the manufacture and export of clothes. But now one of the world’s most ambitious retailers is hoping to do something radical in Bangladesh: actually sell some clothes there instead of just making them.

In July, Uniqlo, Japan’s most popular clothing merchant and one of the largest foreign manufactures in Bangladesh, opened two retail locations in Dhaka, the Bangladeshi capital. The stores are partnerships with the Grameen Bank, the Nobel Prize–winning social and financial institution that pioneered micro-credit lending in Bangladesh in the 1970s. Both stores feature a range of Uniqlo’s trademark colourful basics—all manufactured in Bangledesh, and priced for the local middle class.

Uniqlo’s goal with these locations is explicitly social. The company has vowed to plow any profits back into the local economy, creating jobs and promoting what it calls a “sustainable, community-level business cycle.” It’s a nice piece of PR, especially following April’s horrific factory collapse in Dhaka that killed more than 1,100 people and soured many on the Bangladeshi garment trade. But for Uniqlo, it’s also a pragmatic move.

The company wants to be the world’s largest clothing merchant by 2020. And Bangladesh, while still very poor, could well be an important consumer market in its own right by then. Between 2000 and 2010, Bangladesh’s economy grew at an average of nearly 6% a year, according to the World Bank. More impressively, poverty fell dramatically over the same period, from 49% of the population to less than 32%. And in a country of more than 150 million people, even a proportionally small middle class like Bangladesh’s can be quite large in terms of absolute numbers and buying power.

Of course, for some Canadians, this raises an obvious question: if Bangladesh can get a Uniqlo, why can’t we? The company is expanding aggressively into the U.S. right now. But despite rampant rumours, company officials wouldn’t comment on whether or when Uniqlo will come north of the border. Still, retail analyst David Ian Gray thinks Canadian fans of Uniqlo’s cheap-chic jeans and dresses won’t be waiting forever. Once the company is established in the major U.S. markets, it will look for a beachhead here, likely in either Toronto or Vancouver, he believes. “They have a pretty audacious goal to dominate globally,” he says. And luckily, Canada is still part of the globe.