Byline: Josephine Bow

HONG KONG — Any serious contender for entry to the growing club of global brands must conquer Asia, the fastest-growing market for the world’s top labels in luxury and casual arenas.
A walk through the main shopping districts of almost any Asian capital today underscores just how seriously that lesson is being heeded. Take Hong Kong, a mecca of branded goods: Despite relatively sluggish retail sales, single-label boutiques are popping up like toast.
There’s Tsim Sha Tsui, the recently revived designer shopping area, with CK’s first freestanding outlet, which opened last year near a three-level DKNY superstore; a Jean Paul Gaultier boutique, and a DFS superstore that stocks the first Gap goods available in Hong Kong.
Nearby is brand baron Joyce Ma’s latest multilabel World of Joyce as well as a huge Emporio Armani outlet, which will soon be flanked by a Miu Miu boutique and an Armani Cafe. From Gucci, Prada, Salvatore Ferragamo, Gianni Versace and D&G to Polo/Ralph Lauren and Esprit, the big names are emblazoned everywhere.
“We see our Asia growth to be as important as that in Europe,” said global brand master Calvin Klein at the launch of the CK outlet last fall.
And this city’s fashion followers — from the wealthy luncheon set to fast-track young professionals or the increasingly courted 15-to-25-year-old crowd — are doing their best to merit that attention. It helps that for the six million people crammed into this soon-to-be-ex-British territory, shopping remains the single most common leisure activity.
But they’re not a guaranteed — or easy — sell. For global marketers, there’s no skimping on advertising campaigns, retail decor or merchandise. This is a city of world-hoppers — the same expensive, full-page advertising must appear in local newspapers and magazines as in other fashion-conscious cities, and boutiques must be ultrachic, stocked with a complete selection of the latest lines and regularly renovated.
“Whether here in Asia or elsewhere, it’s all about advertising,” said one retail analyst. “Give people the perception that they’re buying into something that’s exclusive, glamorous and fashionable, even with the trend toward casual. People might wear head-to-toe casual, but it will be all Versace.”
A uniform global retailing strategy is the key to success, according to Louis Vuitton, a proven Asian pioneer. “If the customer in Kaohsiung [Taiwan’s second-largest city] believes the goods there are the same as what he would get in Paris, he will buy,” said Serge Drunschwig, Asia Pacific executive vice president.
The made-in-Europe — or America — cachet remains an important drawing card.
“Guess was an instant hit in Asia because it represented American lifestyle, offering goods that were casual, good value, a fashion element that was carried through all the different lines, and all supported by an exciting image,” said Frank Benjamin, the brand’s Singapore-based Asian distributor.
“Even if the American style is fast becoming a global lifestyle, the Western image is still a very strong element of the brand’s promotional advertising,” he added.
But whether in luxury goods or casual apparel, in the end, it’s the product that matters.
“Hong Kong customers are very sophisticated,” said Drunschwig. “If it’s a strong brand and the product is good, they’ll go for it. If not, they won’t.”
Benjamin echoed that sentiment.
“Our customers are looking for well-made fashion at a good price. They know how to distinguish quality. Most importantly, Guess is now an established part of the Asian fashion scene. Customers are confident of the brand, and they’re comfortable wearing it.”
Guess is also undaunted by the recent plethora of designer-brand casual diffusion lines. “This trend merely indicates that that’s the area of concentration for business,” said Benjamin.
With the increasingly time-pressed Asian customer now barraged by so many names, building up brand loyalty is also crucial to success as a global label. In this vein, once-stodgy British retailer Marks & Spencer has made phenomenal inroads into Hong Kong and is now gunning for the rest of Asia.
The company already counts 133,000 square feet of retail space in Hong Kong alone — including the latest multilevel mega-outlet in the heart of the city. The brand’s message of affordable, high-quality, mostly U.K.-made fashion is strongly reinforced by the spacious, well-stocked stores, as well as the specially made-for-Asia-TV ad campaigns.
M&S has been particularly successful in adjusting to local market demands, in the obvious — stocking smaller sizes — the unexpected — fewer trousers, more short skirts — and for the hugely popular lingerie department, plenty of Asian-fit padded bras. According to market surveys, Asian couples enjoy shopping together at M&S, an uncommon accomplishment.
For overseas brands, all roads for Asian distribution are still good, whether by licensing, franchising, joint venture or independently. Increasingly powerful Asian distributors are now buying into some top global brands. For example, Singapore-based Christina Ong formed a joint venture with DKNY for Asia-wide expansion.
“For foreign principals, a joint venture with the right partner may afford entry into a local market at a faster pace and less painfully,” said Benjamin, who has made no attempt to buy into either Guess or Gucci.
The fact that Gucci is now opening a series of self-operated stores throughout Asia doesn’t rankle Benjamin, however.
“Gucci has been running its own shops in Asia since 1950,” he said. “It’s normal when a label is hot that the foreign principal takes over [more] distribution. Our relationship — a true partnership — goes back nearly 20 years. We are Gucci’s eyes and ears in Asia.”
With the emergence of Hong Kong-based Dickson Concepts, Asia may soon have its first global retailer. Initially a luxury watch distributor, by the end of this year, Poon’s empire is expected to encompass over 300 outlets of prestigious fashion labels, formerly Japanese-owned Seibu department store here and Harvey Nichols in the U.K.
Chairman Dickson Poon is also hot on the trail of the bankrupt Barneys New York. In February, he made an initial bid to buy the retailer, but it was rejected by Barneys’ creditors committee. He’s not giving up, however, and is still interested in the company.
Whatever the mode of distribution, preserving brand integrity and walking the delicate line between expanding sales and overextending a brand are ongoing concerns.
“Brand integrity is looked after constantly,” said Benjamin, “We’re careful to avoid too many promotions. Consistency of product and stores is paramount.”
Retailers are more sanguine about overselling a brand. “If a market can produce greater volume, you’re not threatening brand integrity by opening more shops,” he continued. “If the market can’t, you’ll close the shops.”
Calvin Klein also defends the growing democratization of global brands and downplays the possible negative reaction by wealthy Asian consumers at his “street” ad campaigns.
“Our customers are modern women who wear jeans, too,” he said. “They might just add an expensive jacket or accessories.”
Global brands in Asia face mounting competition from savvy local and regional labels that are knocking off lower-cost versions of overseas fashion trends at ever greater speeds and throwing in trendier retail outlets to boot.
“Everyone borrows,” said Benjamin. “As long as local brands have their own concept and add something of their own, there’s nothing wrong.”
Even as the global branding stakes heat up, brand mangers looking at Asia can take comfort in one undeniable fact: “Total [fashion] sales in the Asia-Pacific region keep growing, as well as market share for foreign labels. There are more and more labels coming in and many are doing very well. Overall, the situation is still very healthy,” said Benjamin.
When the bubble will burst is anybody’s guess. While some markets, like Singapore, suffer from serious saturation, overseas labels continue to pour into previously regulated retail markets such as Indonesia and Korea. “Global brands will ride the current wave until it crashes,” said one observer. “Then, like always, the really strong labels will recreate themselves and rise again.”

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