China and India head for fashion retail explosion

China and India are on course for a spectacular upsurge in demand for fashion retail, according to global accounting and consulting firm Ernst & Young.
Speaking at the Asia Pacific Fashion Forum (APFF) in Melbourne on October 25 Ernst & Young Americas director of retail and consumer products Jay McIntosh said China's growing middle class would give rise to increased demand for high end and luxury fashion.
"Currently the Chinese middle class comprises five per cent of the [1.3 billion strong] population but will comprise around 45 per cent by 2015," he said.
China - the world's biggest recipient of foreign direct investment (FDI) - was also the third largest market for luxury goods after Japan and the US, but would be the second largest by 2015, he said.
"There are two types of luxury consumer in China; the first is the wealthy consumer, while the second is the aspirational white collar worker," he said.
China's "one child per family" policy had led to the "Little Emperor syndrome" in which six adults - one set of parents and two sets of grandparents - looked after each child, creating a generation of "highly indulged youth" characterised by demand for high-end, luxury fashion.
China's main growth areas were the cities of Beijing, Quanzhou and Shanghai he said.
"Shanghai already claims the high end market is under serviced. The opportunities in China are enormous, but brand building is a complex business. It's necessary to team up with local partners and both national and local government approval is required," McIntosh said.
As the fourth largest economy in the world, India also presented opportunities, said Ernst & Young Australia head of retail and consumer products Chris George.
"Unlike China India does not have an ageing population or a one child policy; there is a growing youth market there so areas like street and casualwear are on the rise."
The growth of a middle class and of a credit card culture represented "very fertile ground [for retail] in the future", particularly as the Indian government was considering lifting current FDI restrictions, he said.