As the global fashion market contracts, Asia represents the "great white hope" for many Australian exporters. But new players should do their homework before embarking, writes Belinda Smart.
If there are any lingering doubts over the projected spending power of Asia's rising moneyed classes, developments such as Pavilion Kuala Lumpur give them the lie.
To paraphrase the marketers - "Pavilion Kuala Lumpur shopping centre blends the best of the international retail world and is the defining authority in fashion, food and urban leisure to inspire tourists, foreigners and Malaysians alike. With 1.37 million square feet of shopping offering 430 vibrant stores over seven levels, Pavilion KL is a world-class retail development, with the potential to be the equivalent to the world-famous Ginza of Tokyo, New York's Fifth Avenue and Orchard Road, Singapore."
Further reading reveals the centre has also been earmarked by the government as a tourism asset, testimony to its clout as a retail hub to the increasingly affluent Southeast Asian populations, not to mention those of the Middle East.
Welcome to the new Asia - which not only offers a gateway to markets within its own boundaries, but to key centres across the globe.
Australian labels are clearly benefiting from the explosion of Asia's super-sized shopping destinations. Brands such as Roxy, Diva and Mooks, as well as Tangs department store - which carries an array of Australian brands including Wayne Cooper and Alannah Hill - have all taken up residence at Pavilion KL since it opened in late 2007.
Meanwhile opportunities are springing up in other parts of Asia with notable regularity. In January a slew of Australian fashion labels including Sabatini, Kirrily Johnston and Gina Kim took part in a special event in Seoul - dubbed 'Colours of Australia' - in partnership with Australian Wool Innovation (AWI). The event was designed to grow the Korean market, described by Austrade's Seoul-based Senior Trade Commissioner Martin Walsh as an untapped opportunity.
"In the past year Koreans imported $US5 billion ($A7.6 billion) worth of overseas fashion apparel and accessories, making Korea an opportunity market for Australian fashion industry exporters. Wool garments in particular are a specialty of Australian fashion and offer Korean consumers a uniquely different consumer choice."
Sabatini director Margie Evans-Milich describes Koreans' positive response to the showcase as something of an education.
"The Korean market is very label conscious. Most Koreans love imported brands and what is particularly noticeable is that they are very mindful, in fact totally focused on, the quality and purity of the wool product. They kept asking '100 per cent wool?' and were very keen on the Woolmark branding."
Cultural nuances such as Korea's strong, artisanal tradition of textile and yarn expertise played into this response, she says, whereas in Japan, where the label also has a strong presence, the interest in design and innovative looks is more pronounced.
"It was interesting in Korea, because they were also very enthused by the fact that we are a family owned company that has been running for 60 years. The Koreans have a strong cultural emphasis on family and family run businesses, so this obviously struck a chord with them."
For Evans-Milich, Sabatini's relationship with Milan based show room Studio Zeta, has paid dividends in penetrating the Asian market.
"Studio Zeta represents some of the most prestigious brands in the world, which is obviously very important in the Asian market, because they do give a lot of weight to brands there."
However it's not just high fashion brands that are of interest to Asia's growing affluent classes. Surfwear giant Billabong - whose Asian presence includes offices in Indonesia, Malaysia, Singapore, Taiwan and Japan (its largest presence in Asia) as well as sourcing operations in Hong Kong and China - recently announced it would open its first airport store in Singapore over the next 12 months.
In its most recent trading update at the time of writing, released December 4, it also confirmed sales remained strong in the greater Asian market, despite the ill effects of the global down turn.
Meanwhile Sean Ashby, proprietor of underwear and swimwear label AussieBum, describes Asian sales as "extremely strong".
"In the past three years we have continued to enjoy double digit growth in sales. In the lead up to Christmas 2008 and right now we are experiencing our best sales results ever," he confirms, adding that key growth markets include Taiwan, Hong Kong, Singapore and Shanghai.
The brand currently has a retail presence in Hong Kong, Thailand (Sebu department store), Jakarta (Harvey Nichols) and Singapore (New Urban Male). However, while this has been great for exposure, it contributes to one key problem that hardly needs introduction: counterfeiting. Because of this, AussieBum has opted to concentrate on developing direct sales channels going forward, to reduce the commercial viability of counterfeit operators.
"However we do intend to increase our presence in major department stores and niche stores that are recognised for selling only genuine manufactured brands. Our approach is to first develop brand awareness via marketing and advertising, and naturally allow buyers to become aware of the brand, rather than through a more traditional 'trade show' approach."
To date this strategy has worked well, because it demonstrates the brand's ability to market effectively to an Asian audience and allows buyers to gauge interest from its customers. Ashby says organisations such as Austrade and AusIndustry have also played a critical role.
"For AussieBum AusIndustry has been incredibly supportive in terms of helping keep our manufacturing in Australia and assisting in the development of new ideas that in turn help our brand compete against those also in the international market. The bottom line is Austrade and AusIndustry help Australian businesses succeed and grow internationally."
From Austrade's point of view, the key Asian regions for Australian fashion exporters over the next three to five years will be Singapore, Hong Kong, Indonesia and Japan, while demand for clothing in the middle price-point range is anticipated to remain positive.
However the commission warns that in the current climate, business conditions are changing rapidly and exporters are encouraged to contact Austrade for detailed advice. They should also fully explore payment terms, payment options, returns and discounting policies to ensure they are not caught with non-payment, significant discounting or returns that were not budgeted for.
While Asia's "tiger" status is unquestioned, a spokesperson for the trade commission also stresses that the global down turn is likely to have some form of knock-on effect in Asia, meaning exporters should focus on maintaining market presence rather than growth in the region for the foreseeable future.
Austrade provides up to date market intelligence on key markets across Asia, while export credit agency The Export Finance and Insurance Corporation (EFIC) also provide specialist finance and insurance services to Australian companies exporting and investing overseas.
And regarding which strategies for entering the diverse Asian market work best, while there's no hard and fast rule, common sense applies.
"Do research on both your prospective client and the market you are hoping to enter, and consider choosing a partner with a solid track record."