Austrade Manila
Austrade Manila senior business development manager Eva Yazon offers exporters the low down on the Philippines TCF market.
What you need to know
Tigerlily, Seafolly, Wahine, Billabong, Grab, Running Bare, Endless Spirit, David & Goliath, Angry Minds, Roxy, Sass, Fate, Quiksilver, Industrie, Purr, French Kitty, Voodoo Dolls - these are but a sampling of the approximately 25 Australian fashion brands and growing which have found a home in the Philippines in the last couple of years.
With 60 per cent of its 89 million population under 30 years of age, a thriving economy powered by consumer spending and a rapidly expanding retail sector, the Philippines is an ideal market for Australian fashion companies.
Australian fashion enjoys a niche market in the Philippines. Positioned not to compete head on against European signature brands available in Philippines it is recognised recognition for cutting edge designs and trendy artistry by upcoming young designers.
Gaps in the market
Streetwear, swim and surfwear have traditionally been the staple of Australian exports to the Philippines. However, market interest in men's streetwear and childrenswear is picking up. Interest in Australian concept stores is also growing because of the success of European concept stores in the Philippine retail scene.
Australian fashion brands are sold in up-market department stores or multi-label boutiques. They target the upwardly mobile young-adult market made up mostly of 18 to 35-year-old women who are upwardly mobile, financially empowered and fashion forward. They keep a close eye on international fashion trends and are keen to try-out the latest fashions.
Do your homework
The Philippines is a price-sensitive market. Retailers always try to negotiate the best price from their suppliers to be able to offer clothes at prices, which the market can afford. Therefore, they are not averse to clothes being manufactured in China as this means lower freight costs and shorter shipping times. However, the label must emphasise that the clothes were designed and conceptualised in Australia.
Philippine retailers generally prefer Australian brands that are currently sold in other Asian markets. This assures them that the brand has achieved some degree of exposure, the sizing is already tailored to the smaller Asian build and the pricing suited to Asian budgets.
Dealing with trade
Buying season is March for delivery in September in time for the holiday season, and August for delivery in February for summer. Philippine retailers generally attend spring/summer fashion trade shows as the country does not have a fall/winter season.
Import duty on fashion apparel is 15 per cent and VAT is 12 per cent. Normally, retailers use a factor of three to four of landed cost to estimate their retail price.
Visual marketing tools are very important in the decision-making process. Importers/retailers want to look at websites, look books and samples from before they make decisions.
By Eva Yazon