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LONDON, United Kingdom — Once a Western-centric industry, the global fashion market’s focus is shifting East. Asian countries continue to experience strong economic growth, with the GDP growth rate for continent projected to average 5.6 percent in 2018 and 2019 according to a report released by the International Monetary Fund in May 2018.
The South East Asian fashion industry feeds heavily on its tourism trade, which exploded between 2010 and 2015 after the number of visitors grew 49 percent. China’s satellite countries, which draw millions of tourists from the Chinese mainland every year, and the fashion businesses continue to benefit from increased touristic expenditure and tourist flow. In 2017, Alibaba launched new sales channels in Singapore, Malaysia, Hong Kong and Taiwan, and Dover Street Market opened in Singapore. Seoul is also proving to become a prominent luxury player, with Burberry boasting nearly 10 percent revenue exposure to South Korea, and Seoul standing as the second largest market for Vetements after the US. However, tourism volume can be volatile, and these countries especially rely on Chinese tourists for economic security.
Known for its luxury shopping malls and experience retail, Singapore is a magnet for the wealthy elites of countries such as Indonesia, Malaysia and Thailand. From ION Orchard to the Mandarin Gallery, hundreds of malls and shopping complexes are concentrated along the cityscape, with dozens sitting on Orchard Road and around Marina Bay. While the threat of e-commerce is a very tangible reality to established retail businesses on the island-state, Savills estimates the supply of retail space in the island cityscape will increase from 1.8 million square-feet in 2017 to 4.6 million square-feet by 2021. Singapore’s government has also proposed an e-commerce tax earlier this year to alleviate online retail’s challenge on brick-and-mortar vendors. The wholesale and retail trade expanded 4.8 percent in 2017, with predictions of further growth on the back of the ongoing recovering of the labour market.
A long-time retail rival to Singapore, Hong Kong’s retail pre-eminence has also appeared unsteady due to political tensions with mainland China, which has affected its tourism flow. In 2017, the city celebrated the 20th anniversary of its handover from British to Chinese governance, with hopes that the calendar event would benefit the luxury retail economy. Instead, the calendar event resulted in democracy protests and subsequent arrests, further marring the city’s tourism reputation. However, an $800 million expansion to The Hong Kong International Airport is projected to boost Hong Kong’s economy by $235 billion by 2030. Last year, Swire Properties, the owners of luxury shopping mall Pacific Place which also owns properties in mainland China and Singapore, had to refresh its tenant mix to cater to changing spending habits, signing 30 new tenants and doubling its food and beverage outlets.
‘Brand Korea’ is also going from strength to strength, formulated from a fusion of fashion, music, entertainment and celebrity — namely, the K-Pop and K-Drama culture, which made Seoul a popular destination for Chinese tourism. Recent strains with China and other factors have seen the Chinese tourism flow gradually ebb, but Seoul was still the fifth wealthiest city in the world in 2017, with the country sitting as Asia’s fourth largest economy.
The average disposable income in South Korea is increasing at a compound annual growth rate of 6 percent. As a result, the country is a key opportunity for luxury brands, and accounts for around 5 percent of the global market for personal luxury goods, with 75 percent of this spending concentrated in Seoul.
As a nation of 50 million people accustomed to buying world-class domestic brands, South Korea is in an enviable position. However, Korea’s strength in apparel manufacturing is counterbalanced by its comparative weakness building fashion brand identities with a global appeal. While Korean brands in the automobile and electronics sectors may be famous the world over, few Korean fashion brands have cracked the global market like their Japanese competitors. One of the positive consequences of South Korea’s relative self-sufficiency is a strong domestic manufacturing base, situated in a concentric ring surrounding the Dongdaemun Design Plaza (or DDP, as it is known locally).
What is clear is that the city of Seoul and the Korean government are putting weight behind Seoul Fashion Week. In the context of slowing exports, which dropped from an average of 4.4 percent between 2001 and 2011 to 2.8 percent in 2016, K-Fashion could be a crucial growth vector for the South Korean economy.
Here are some of the best job opportunities in Hong Kong, Singapore and Seoul now live on BoF Careers: