EMERGING FASHION MARKETS

The fashion market as a whole is one of the most profitable industries in the world with the global apparel market being valued at US$1.7 trillion in 2012 and employing approximately 75 million people. However the question lies at who is consuming these products – the fashion market is divided from economy to luxury but its haute couture that makes the money. For conglomerates such as LVMH, Kering group and PPR the couture and clothing division generates the most profits- being 7139€ of the 201715€ total profit for the first 9 months of 2013. And surprisingly, when analysing the consumption, its Asia who are the biggest consumers.

It’s known that china is the biggest consumer of luxury products with Dior having held it show in Shanghai China on the 30^th march 2013, but its not just the new market Dior are interested in its establishing their brand prominence “Haute Couture is what gives our business its essential essence of luxury. The cash it soaks up is largely irrelevant. Set against the money we lose has to be the value of the image couture gives us. Look at the attention the collections attract,” stated Bernard Arnault, head of LVMH, and with China being one of the big markets of tomorrow but its not alone.

China is associated in the emerging markets of BRICS, a combination of upcoming economies including Brazil, Russia, Indonesia and China. Together the countries inhabit 2.8 billion people, making up 40% of the worlds population and account to 25 percent of global GDP, their economic prominence is due to their rising number of middle classes totally a rise in economic output of 6% from 16% to 22% between 2000 to 2008.

However they are also being rivaled by other emerging economies of the MINTS (Mexico, Indonesia, Nigeria and Turkey) and TIMPS (Turkey, Indonesia, Mexico and Philippines). They are overtaking BRICs in terms of of profits, due to rapid growth and investment. Nigeria being a key growing economy as recognized by Goldman Sach’s Jim O’Neill, when creating MINTs in 2014. But it seems other countries such as Quatar and UAE are the next upcoming markets with rapid expansion such as the ‘Doha’s International Airport’ opening in Quatar to aid congestion and the rising middle classes.

The women in the Middle East, despite cultural standards of dress, have become the biggest consumers of fashion, with Catherine Riviere, head of haute couture at Christian Dior stating "All the royal families of the Middle East are our customers," . The haute couture buyers are not reluctant to spend thousands on dresses for events where men will not be present, and the opportunities to do so are more frequent than European social calendars – having up to 15-20 weddings per year.

But despite new emerging economies and the decline in China’s growth in the luxury goods market only being 2% after rising 30% in 2011, brands are still keen to invest there and in Europe. Bottega Veneta’s Bizzarri  has said “I am convinced that consumers from emerging markets will buy there (in emerging markets) if they see that the brand is well positioned in Europe’, meaning that the reputation of Europe is still important. This is also shown in LVMH’s figures of revenue for the 9 months of 2013 showing still showing an increase of 17% against china’s 31%.

The emerging markets are beneficial for the brand as it allows expansion but also some conflict due to differentiating cultural standards, ethics and regulations.