Traditional European and American labels are taking a step back as Asian brands begin to take the retail world by storm.
Even as the world is globalising, or in many ways has globalised fully, it is simultaneously localising in just as many ways. Specialist professions can now be drawn from the ranks of local talent as frequently as they are welcomed from overseas. Social trends have favoured everything from regional travel to eating at chic restaurants which boast “fresh local” rather than exotic menus of imports.
That sense of localisation applies to retailing as well. For nearly two decades, Hong Kong was a shopping Mecca for its wealth of high-end and branded products — clothing, accessories, electronics — without the burden of steep sales taxes that increased prices. Anyone looking for the latest and greatest in European and American luxury goods or trendy fast fashion with limited-edition designs was sure to find them in Hong Kong, which is also perhaps the only city in the world with such a concentration of brands like Prada, Chanel, Kate Spade, Gap, H&M, Christian Dior, Louis Vuitton, Giorgio Armani, Gucci and Zara in a relatively compact area.
Now, however, Asian brands and products are gaining traction everywhere in the world. The “gross national cool” of Japan (as Time magazine referred to Japanese pop culture back in the early 2000s), the ongoing fervour surrounding all things Korean, and the emergence of China as a potential cultural juggernaut have refocused the concept of what is trendy and fashion forward.
If the recent downturn in the retail property sector in Hong Kong has had a silver lining, it is the sudden availability of more affordable rental space for retailers still looking to gain a foothold in the market. As the European and North American brands scale back and exercise more fiscal restraint (though admittedly new players continue to trickle in), hip Asian brands are filling the gaps and taking advantage of a new landscape.
Two of the earliest brands to make headway anywhere overseas are Muji and Uniqlo, the Japanese homewares and casual fashion titans that occupy space in modern Shibuya towers as easily as they do in 18th century heritage buildings in Barcelona. This year, Hong Kong will be a part of many major Asian brands’ plans for expansion, alongside locations elsewhere around the globe.
Currently, Muji is gearing up to open a new store in Pacific Place, possibly a sign that the luxury-focused mall is bowing to consumer pressure for more variety and less brand overload. Discount retailer Don Quijote — or Donki to its fans — is about to open its first Hong Kong outlet in Tsim Sha Tsui, part of a regional expansion plan which also includes Singapore, Thailand, Taiwan, Korea and the US. From Korea, cosmetics brands such as Innisfree, Etude House and 3CE continue to open new shops in key international locations, joining compatriots Gentle Monster and Line Friends as far afield as New York.
Chinese casual apparel label Meters/bonwe, tech brand DJI and restaurant chains Haidilao have recently launched in Kuala Lumpur and Hong Kong – and in one case in a historic Soho property in London.
From Taiwan, restaurant Din Tai Fung, which has had four outlets in Hong Kong for years, now boasts addresses in Japan, the UK, the US, Thailand, Australia and beyond. Singaporean shoe brand Charles & Keith operates more than 300 stores in Indonesia, the Philippines, the UAE, India, South Africa. Michelin-rated diner Putien has launched in Jakarta, Shanghai and Taipei. Filipino fast-food giant Jollibee branched into Europe last year, starting with a shop in the historic heart of Milan before heading to London.
Those Asian retailers represent just the tip of the iceberg.
There are a host of reasons for the sudden flood of Asian brands into worldwide markets, particularly in Southeast Asia. Chief among them is the shifting consumer desire for more choice and for something new — something only heightened by increased awareness thanks to the internet. Just a few decades ago shoppers did not know what they were missing; now that is no longer the case.
Asia’s position as one of the globe’s key manufacturing locations doesn’t hurt: it is easy to expand into brick-and-mortar shops in Vietnam or Indonesia when a brand has an existing factory there and most likely an online presence. Overseas, Asian products are renowned for their relatively low cost, which feeds into that shifting consumer demand.
Factors such as proximity and logistics play their part too, with three of the world’s busiest ports — Hong Kong, Singapore and Shanghai — on the doorstep making regional expansion a logical choice.
While restaurant brands do not rely on physical goods for growth, their familiarity (within Asia) together with the rising numbers of professionals, students and middle class travellers providing an endless consumer base, are attracting eateries to move beyond their own borders.
There will be challenges ahead: Chinese technology continues to struggle with consumer confidence in most parts of the world, for example. But the immediate future looks Asian.
This feature originally appeared in the Inside Retail Hong Kong’s magazine edition, available by subscription in digital or print versions.